The leader of Semiconductor Manufacturing International Corporation (SMIC) stated that the demand for products continues to outpace supply. He mentioned that the increase in rush orders and quicker shipments is expected to slow down in the fourth quarter. Recent tariff policies have not led to the anticipated “hard landing.” SMIC is successfully managing high customer demand despite changing trade and tariff situations.

About SMIC

SMIC is a partially state-owned semiconductor company in China. It is the largest contract chip manufacturer in mainland China, headquartered in Shanghai. As of August 8, 2025, the signals in the semiconductor sector are mixed but actionable. The current scenario of demand exceeding supply at SMIC indicates strong performance in the short term. This suggests that making sharp bets against the Chinese tech sector may be too early. The notion that a “hard landing” has been avoided is supported by recent economic data. For example, China’s official manufacturing PMI in July 2025 remained above 50 at 50.8, indicating growth. Additionally, global semiconductor sales increased by 4.9% year-over-year in June 2025. This context supports holding or starting short-term bullish investment positions.

Investment Strategy and Market Outlook

In the upcoming weeks, consider near-dated call options on SMIC and related tech indices to take advantage of the strong orders. With the positive outlook on tariffs, implied volatility might decrease, leading to better entry prices. This strategy aims to capitalize on current demand before the market shifts its focus. However, the clear warning about a slowdown in the fourth quarter provides a specific timeframe for us to adjust our strategy. We should plan for a potential market shift by late September, preparing for a downturn or increased volatility. This could include buying put options with expirations in November 2025 or later to protect against expected weaknesses. This situation resembles past industry cycles, like those in 2021-2022, where a surge in demand was followed by a major inventory correction. The CEO’s early warning gives us a unique chance to prepare for this change before it appears in earnings reports. Create your live VT Markets account and start trading now.

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