BEIJING, May 9 (Reuters) - China's largest contract

chipmaker SMIC reported a first-quarter revenue rise

of 19.7% on Thursday, as its global customers rebuilt their

inventories.

SMIC said in a statement that its revenue rose to $1.75

billion for the three months through March, topping the $1.69

billion forecast by analysts polled by LSEG.

The global semiconductor industry has shown signs of

recovery from a post-pandemic era of slower growth.

"In the first quarter 2024, our global customers are more

willing to build up inventory," SMIC said, adding that demand

from some is expected to continue in the current quarter.

Global semiconductor sales rose by 15% to $137.7 billion in

the first quarter of 2024, the Semiconductor Industry

Association said, with China experiencing a significant sales

increase of 27.4% compared to the same period last year.

The boom in artificial intelligence (AI) has also led to a

spike in demand for high-performance AI chips.

However, most of SMIC's manufacturing facilities are for

making mature node chips, largely used in less-sophisticated

electronic products like lower-end smartphones, meaning that it

has not been able to benefit from the AI boom as much as

international competitors such as TSMC.

Competition has also been fierce, especially around mature

node chips, where companies including SMIC have built up

capacities at a rapid speed. China's total integrated circuit

output surged 40% to 98.1 billion units in the first quarter of

2024, official data showed.

However, other countries have expressed concerns over the

cash China has been putting towards makers of high-tech products

such as semiconductors, raising fears that it will cause

overcapacity that could fuel a new wave of cheap exports.

SMIC came into the spotlight last year after teardown

analysts revealed it had assisted Huawei in developing

one of the most advanced chips ever manufactured in China.

Huawei's latest smartphone, the Pura 70, also features a

chip produced by SMIC, a teardown of the phone showed.

Unaudited profit attributable to owners of China's largest

chip foundry fell to $71.79 million from $231.1 million a year

before and below the $80.49 million expected by analysts polled

by LSEG.

SMIC's capital expenditure was $2.2 billion, compared to

$2.34 billion for the first quarter of last year.