Leading chip manufacturer in China, SMIC, reveals a 55% drop in quarterly net profit

Leading chip manufacturer in China, SMIC, reveals a 55% drop in quarterly net profit

Leading chip manufacturer in China, SMIC, reveals a 55% drop in quarterly net profit

The company's unaudited profit for owners for the quarter was $174.68 million, less than the average forecast of $277 million and down from $385.53 million in the previous quarter, according to an LSEG poll of analysts.

Leading chip manufacturer in China, SMIC, reveals a 55% drop in quarterly net profit.

The largest chip manufacturer in China, Semiconductor Manufacturing International Corp (SMIC), surprised analysts on Tuesday by reporting a 55% decline in fourth-quarter earnings. The company attributed the decline to both strong industry rivalry and sluggish worldwide demand.

The company's unaudited profit for owners for the quarter was $174.68 million, less than the average forecast of $277 million and down from $385.53 million in the previous quarter, according to an LSEG poll of analysts.

The survey's average revenue prediction of 1.66 billion yuan was somewhat exceeded by the 3.5% increase in revenue to $1.68 billion for the quarter.

Revenue decreased to $6.32 billion for the whole year from $7.27 billion in 2022. According to SMIC, net income decreased from $1.82 billion in 2022 to $902.5 million in 2023.

Capital expenditure reached $7.47 billion yuan by 2023. In contrast, this amounts to $6.35 billion by 2022, indicating a 17.6% annual growth.

Compared to last year, it anticipates that capital expenditures will be essentially unchanged this year.

The pandemic-caused chip scarcity transformed into a glut when the economy slowed and consumer demand for the chips decreased, sending the semiconductor industry into a recession in recent years.

However, there are indications that the market may rebound in the next year as a result of growing consumer demand for semiconductor-using goods like smartphones and other gadgets.

SMIC projects that the gross margin for the first quarter of this year will be between 9 and 11%, and for the fourth quarter, it will be 16.4%.

in 2023.

Last year, the business gained worldwide attention when experts said it had assisted Huawei in creating one of the most sophisticated semiconductors produced in China. In August of last year, Huawei unveiled the Mate 60 smartphone series, which had this processor.