BEIJING, Reuters China39;s Semiconductor Manufacturing International Corp said on Friday it will steer clear of a price war in the industry, and forecast current quarter sequential revenue growth of up to 15.

CoCEO Zhao Haijun, who had warned about the price war in May, said We have indeed encountered a situation where some of our peers with excess capacity are using low prices to attract customers.

SMIC will not take the initiative to cut prices, Zhao added in an earnings conference call on Friday.

Zhao said the industry was experiencing some favourable trends which will continue into the second half of the year. These included geopolitical tensions leading to companies switching to local semiconductor suppliers for the Chinese market.

SMIC forecast a 13 to 15 quarteronquarter revenue increase for the current quarter.

The company reported results late on Thursday that beat expectations.

For the three months ended June 30, SMIC reported 164.6 million in unaudited profit attributable to owners, topping the average 103.8 million expected by analysts polled by LSEG.

Revenue rose by 21.8 yearoveryear to 1.9 billion, also beating forecasts and exceeding the guidance it provided on a quarteroverquarter basis in May. However, net income tumbled by 59.1 yearonyear.

Capital expenditure was 2.25 billion in the quarter.

SMIC shares surged 7 in Hong Kong on Friday morning amid a broad market rally which lifted the benchmark index by 2.

The results reflected signs of a…