SMIC, China’s biggest chip foundry, recorded sharply higher net profit and revenue, cashing in on robust orders for legacy and specialty semiconductors. This surge comes as artificial intelligence-driven demand squeezes production capacity worldwide.

The stronger-than-expected results occur as non-AI sectors deal with a severe semiconductor shortage, caused by global foundries prioritizing capacity for AI-related demand. This has prompted many international and domestic clients to shift mature-node manufacturing orders to China, benefiting established players.

The Shanghai-based contract chip maker said Thursday that it expects industrial momentum and the spillover effects generated by AI to persist, driving broad-based chip demand. The company’s net profit more than tripled in the second quarter to $479.2 million, beating the $283.1 million expected by analysts.