China’s top chipmaker, Semiconductor Manufacturing International Corp (SMIC, 中芯國際), yesterday said that its profit last year plunged significantly from the previous year, against a backdrop of surging trade tensions between the US and China.
“Unaudited profit attributable to owners of the company was US$492.7 million in 2024, a decrease of 45.4 percent from US$902.5 million in 2023, mainly due to the decrease of investment income and financial income,” SMIC said in a filing to the Hong Kong Stock Exchange.
Profit in the final quarter of last year also slumped, the filing showed, dropping 38.4 percent year-on-year to US$107.6 million, compared with analysts’ estimate of US$193.45 million, according to LSEG data.
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Meanwhile, SMIC’s fourth-quarter revenue grew 31.5 percent to US$2.2 billion, it added, compared with market expectations of US$2.18 billion, according to LSEG.
The company reported a gross margin of 22.6 percent in the fourth quarter, compared with 16.4 percent a year earlier.
SMIC said that, “based on the premise that there are no significant changes in the external environment,” it expects revenue growth in the year ahead “to be higher than industry average in the same markets.”
SMIC’s business remains overwhelmingly focused on mature-node chips for consumer electronics and home appliances, with advanced manufacturing projects, such as Huawei Technologies Co’s (華為) smartphone chips, representing only a marginal portion of its revenue.
The company has ramped up capital investments over the past few years to expand its production capacity and bolster China’s domestic semiconductor capabilities.
SMIC’s capital expenditure surged to US$7.3 billion in 2023 from US$4.5 billion in 2021, reflecting its aggressive expansion strategy. The company invested another US$7.33 billion last year, its latest earnings release showed.
Additional reporting by Reuters
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