SMIC increased revenue and profit on the wave of recovery in the semiconductor industry

The largest Chinese contract chip manufacturer Semiconductor Manufacturing International Corp (SMIC) reported an increase in net profit in the third quarter by 58.3%. The semiconductor industry has shown signs of recovery after a long decline.

Image source: smics.com

SMIC’s net income from July to September 2024 was $148.8 million, but this figure fell short of analysts’ expectations, which predicted $199.71 million. Revenue for the same period grew by 34% to $2.17 billion, which is almost in line with the forecast at $2.2 billion; gross margin was 20.5%, higher than the 18-20% expected. Global semiconductor sales in the third quarter increased by 23.2% to $166 billion; The Chinese market showed growth of 22.9%, according to data from the Semiconductor Industry Association (SIA).

SMIC, which primarily produces products using mature technologies for less complex electronics, attracted attention when it was revealed that it produced advanced processors for Huawei’s flagship smartphones, including the Mate 60 and Pura 70. The advanced chip segment remains a small part of SMIC’s business, analysts said; Moreover, the company has yet to take advantage of the artificial intelligence boom that has greatly strengthened competitors, including industry leader TSMC. SMIC’s capital expenditures for the reporting period amounted to $1.2 billion; in the third quarter of 2023 they were $2.13 billion.