SMIC, China's largest chip maker, reported a significant increase in its third-quarter earnings, with sales up 14.2% quarter-on-quarter (QoQ) and 34% year-on-year (YoY). The company's net income rose by 58.3% YoY to approximately $148.8 million, although this fell short of analysts' estimates of $199.71 million. Revenue for the quarter reached a record $2.171 billion, surpassing the $2 billion mark for the first time. The gross margin recovered to 20.5%, and the company added another 21,000 wafers per month (wpm) of 12-inch capacity, increasing utilization to 90.4%. SMIC's guidance for the fourth quarter projects a 2% growth in sales QoQ and an 18-20% gross margin. The positive earnings report comes amid signs of recovery in the chip sector, which has been in a downturn since 2022. Earnings were up 44.7% YoY, and 78.5% of sales were attributed to the chip sector recovery.