[News] SMIC Reports Record Q3 Revenue, Cautious on Expansion Amid Overcapacity Warnings

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According to a report in Commercial Times, the leading Chinese semiconductor foundry, SMIC (Semiconductor Manufacturing International Corporation), released its financial report for the third quarter on the evening of November 7. Due to robust growth in wafer production capacity and sales, SMIC’s revenue in the third quarter increased by 14% sequentially to USD 2.17 billion, a record high, reaching the milestone of USD 2 billion in a single quarter for the first time.

As for the Q4 guidance, however, the forecast is relatively muted. According to its press release, SMIC forecasts a 2% year-over-year increase in revenue for the fourth quarter. The company also expects its gross profit margin for the fourth quarter to be between 18% and 20%.

According to a report in the Reuters, in its third-quarter earnings call, SMIC CEO Zhao Haijun noted that current oversupply conditions are prompting the company to adopt a more cautious approach to capacity expansion. Zhao pointed out that industry utilization rates are around 70%, well below the optimal 85%, reflecting significant overcapacity. He warned that this overcapacity, especially in mature node chips, is likely to persist through 2025, if not worsen. As a result, SMIC was cautious on building new capacity.

In its press release, SMIC reported a 34% increase year-over-year in revenue for the period, reaching USD 2.17 billion. The gross profit was USD 444.2 million, and the gross margin was 20.5%, compared to 13.9% in 2Q24 and 19.8% in 3Q23.

According to Commercial Times, citing Wallstreetcn, SMIC’s financial report indicated that its wafer sales in the third quarter increased by 38% year-over-year to 2.122 million units. Additionally, the company added a monthly production capacity of 21,000 12-inch wafers in the third quarter, further optimizing its product structure and increasing the average selling price.

The Commercial Times report pointed out, citing Wallstreetcn, in terms of revenue composition, the revenue share from 8-inch wafers dropped by 4.5 percentage points from the previous year to 21.5%, while the revenue share for 12-inch wafers reached 78.5%.

According to another report by Reuters, SMIC is primarily known for producing mature node chips for standard electronic devices. However, the company is also involved in manufacturing advanced chips for Huawei’s high-end smartphones, including the Mate 60, launched last August, and the Pura 70 series, released in April.

According to a report from Wccftech, it was rumored that SMIC is able to produce 5nm chips for Huawei this year, without the need for extreme ultraviolet (EUV) lithography machines manufactured by Dutch company ASML, but later it was indicated that Huawei’s next Kirin SoC for the Mate 70 Series will still be limited to the 7nm process but will utilize a more refined “N+3” node, according to another report by Wccftech.

 

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