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SMIC’s Net Profits Down Significantly During First Half of 2023

Chinese semiconductor manufacturing company SMIC has released an earnings report for the first half of 2023. Well-known Chinese news site Sohu (NASDAQ: SOHU) reported that SMIC’s revenue was approximately US$3.023 billion during this period, a year-over-year decrease of 19.3 percent. Net profits were approximately US$634 million, a year-over-year decrease of 34.10 percent.

The company’s revenue from wafer fabrication decreased to US$2.759 billion during the reporting period, a 21.0 percent year-over-year decrease. Wafer fabrication represents nearly 90 percent of SMIC total business. Management stated that, due to global changes in the structure of the industrial chain and the re-integration and allocation of resources, it is foreseeable that future competition will be more intense.

SMIC expects that the unfavorable situation of “volume growth with price decline” in the second quarter will continue into the third quarter. This is due to the United States’ intensified pressure on China’s chip industry as well as the laggardly recovery of the global smartphone and consumer electronics industries.

According to the latest 2022 sales rankings released by pure-play foundry companies around the world, SMIC ranks fourth in the world and first among Mainland Chinese companies. As of now, China is still the world’s largest consumer market for integrated circuits and discrete devices.

Source: Sohu, August 25, 2023