SMIC’s 59.1% drop in quarterly profit did not prevent it from exceeding analysts’ expectations

The Chinese company SMIC remains the largest contract chip manufacturer in the country, its financial statements involuntarily depend on the geopolitical situation, since Chinese chip developers seeking independence from imports in many cases turn to it. Last quarter, SMIC’s revenue grew 21.8%, but net income fell 59.1%.

Image Source: SMIC

A Reuters publication succinctly describing SMIC’s quarterly report states that the company’s revenue in the past quarter grew by 21.8% to $1.9 billion and exceeded analysts’ expectations. At the same time, the amount of capital expenditures reached $2.25 billion, and net profit decreased by 59.1% to $164.6 million. However, it turned out to be significantly higher than the $103.8 million expected by analysts.

As recently became known from a report by the SIA association, in the second quarter the market for semiconductor components in China in monetary terms grew by 21.6%. Of course, SMIC cannot compete in terms of revenue dynamics with the Taiwanese giant TSMC, which increased the corresponding figure by 40% in the second quarter, but for the difficult conditions in which SMIC has to operate, it is doing well so far. The company expects to grow revenue by 13% to 15% sequentially in the current quarter.