China’s largest contract chipmaker, Semiconductor Manufacturing International Corp (SMIC), reported a sharp increase in second-quarter profit as strong demand for AI-related semiconductors boosted both earnings and revenue.

Profit attributable to shareholders reached $479.2 million, more than three times the level recorded a year earlier and well above analyst expectations of about $253 million.

Quarterly revenue also exceeded forecasts, rising 36% to more than $3 billion as customers increased orders for chips used in artificial intelligence, data centers and other high-performance computing applications.

SMIC said AI demand is expected to remain strong in the second half of the year. The company plans to adjust existing manufacturing capacity and accelerate new production lines to help address ongoing supply constraints across the semiconductor industry.

The results underline how China’s domestic chipmakers are benefiting from rising AI investment while Beijing continues to strengthen local semiconductor production and reduce dependence on foreign technology.