Bryson DeChambeau made four birdies in his last five holes on his way to a 10-under two-day total and a one-shot lead over Ian Poulter and Si Woo Kim.
Smith is at 6-under after a second consecutive 3-under 68 but despite being only four off the pace finds himself sharing 13th place.
The reigning Australian PGA champion was one of only three Australians to qualify for the weekend, Rod Pampling and Aaron Baddeley both making the cut on the number at even par.
John Senden followed yesterday’s excellent 69 with a disappointing 74 to miss the cut in his first PGA Tour event in almost a year.
Three back nine bogeys, including back to back dropped shots at his final two holes, left him one outside the even par cut line though he will take confidence from many positive signs in his game after such a lengthy break.
Marc Leishman, Geoff Ogilvy and Greg Chalmers will all also have the weekend off.
The most impressive par you'll see today.#QuickHits pic.twitter.com/lffgbR2Z1s
— PGA TOUR (@PGATOUR) April 13, 2018
Smith, who played the Harbour Town course’s back nine first, looked to be in early trouble when he dropped two shots in the first five holes but turned things around in emphatic fashion with birdies at 15,16 and 18.
Three more gains against a lone bogey on the inward journey have him in good position ahead of the weekend following his T5 result at Augusta National last week.
For leader DeChambeau Hilton Head has proved a happy hunting ground in the past, the former US Amateur champion finishing fourth at the venue in his professional debut in 2016.
The unorthodox 24-year-old was out in 33 with an eagle and two birdies against two dropped shots but was blemish free on the run to the clubhouse to sign for a 64.
“Ball striking,” was his blunt response when asked the key to today’s low score.
“I had a couple of weird errant shots but other than that my ball striking was fantastic, I was flagging it all day to three feet.
“People discredit me I think with my wedges being a little longer (DeChambeau uses a single length set of irons) and sometimes I don’t hit it as close but I personally think they worked beautifully today.”
Already a winner on the PGA Tour DeChambeau knows there is a lot of golf left to be played but said his game plan for the weekend was simple.
“Get after it,” he said when asked his approach. “Hit a lot of fairways, hit a lot of greens.
“My driver was a little errant on a couple of shots today but I recovered beautifully so if I can keep recovering and hit even a couple more fairways and a couple more greens I think it’ll be just fine.”
WHAT YOU CAN LEARN FROM RICKIE FOWLER'S SWING:
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