Foundry SMIC reports falling sales, profits and tough times ahead

Foundry SMIC reports falling sales, profits and tough times ahead

Business news |
By Peter Clarke

China’s largest foundry chipmaker Semiconductor Manufacturing International Corp. (Shanghai, China) has posted a reduced net profit on declining sales in its 1Q23 financial results.

The company’s revenue was US$1,462.3 million in 1Q23, compared to US$1,621.3 million in 4Q22, and US$1,841.9 million in 1Q22. On an annual basis SMIC’s revenue decreased by 20.6 percent. The company’s net profit was US$231.1 million, 48 percent of the net profit a year earlier.

The company is forecasting that sales revenue will increase in the 2Q23 by between 5 and 7 percent sequentially. At the mid-point this will take SMIC revenue to US$1550.0, down 18.6 percent from 2Q22.

Was that the bottom?

The company said it expects capacity utilization and shipments to improve in 2Q23.

The company said it would continue with capital expenditure plans. SMIC Shenzhen
has entered mass production; SMIC Jingcheng is expected to enter mass production in 2H23; SMIC Oriental is expected to start the mini-line by the end of this year; SMIC Xiqing is still under construction.

SMIC said it expects revenue to have bottomed and increase in 2Q23. This contrasts with market leader TSMC which is predicting a reduction of revenue in 2Q23. However, SMIC said the magnitude of its recovery in 2H23 is still unclear.

“Overall, we haven’t seen the signs of market full recovery. Thus, the full year’s guidance remains unchanged, revenue is expected to decline by low-teens percentage year-over-year,” the company said in a statement.

Related links and articles:

News articles:

SMIC lays plans for North China wafer fab

Opinion: Misplaced outrage over near-7nm SMIC chip

SMIC plans for $9 billion Shanghai wafer fab

If you enjoyed this article, you will like the following ones: don't miss them by subscribing to :    eeNews on Google News


Linked Articles