China’s largest semiconductor manufacturer, SMIC, has raised prices for some of its most sought-after production capacity as demand linked to artificial intelligence continues to increase.

The company said AI-related demand is expected to remain an important source of orders for its semiconductor manufacturing business.

SMIC plays an important role in China’s technology industry because it manufactures chips for a wide range of customers.

The company has been working to expand production capacity as demand for semiconductors increases across artificial intelligence, smartphones, automobiles and other technology industries.

The increase in prices reflects the growing pressure on semiconductor manufacturers as companies around the world compete for access to chip-production capacity.

AI systems require enormous amounts of computing power, which has significantly increased demand for advanced processors and supporting semiconductor components.

The development also highlights China’s efforts to strengthen its domestic semiconductor industry.

Chinese technology companies have been investing heavily in local chip production as the country seeks to reduce dependence on foreign semiconductor suppliers.

Industry analysts expect AI-related demand to remain a major factor shaping the semiconductor market.

SMIC’s ability to increase production while managing costs and technological challenges will therefore be closely watched as competition in the global chip industry intensifies.

Source: Taipei Times, reporting from Reuters