Semiconductor Manufacturing International (SMIC), China’s leading chipmaker, has disclosed its financial performance for the October-December quarter, revealing a 3.5 percent increase in revenue to $1.68 billion.

Revenue contribution from Americas has declined to 15.7 percent of its total global sales in Q4 2023 from 25.3 percent in Q4 2022, SMIC revealed.
Despite this revenue growth, SMIC has reported a decline in quarterly profit, with earnings totaling $174.68 million, down from $385.53 million in the corresponding quarter of the previous year.

For the full year 2023, SMIC’s revenue amounted to $6.32 billion, reflecting a drop from $7.27 billion in 2022. Net income also experienced a notable decline, dropping to $902.5 million in 2023 from $1.82 billion in the preceding year, as per SMIC’s financial disclosures.

Capital expenditure for the year 2023 reached $7.47 billion, marking a notable increase from $6.35 billion in 2022, indicating a 17.6 percent rise year-on-year. SMIC anticipates that capital expenditure will remain relatively stable this year compared to the previous year.

The following chart indicates sales of SMIC from industry verticals such as smartphone, tablets, consumer electronics, IoT, Industrial and Automotive.
The semiconductor industry has faced challenges in recent years, transitioning from a period of chip shortages driven by the pandemic to a surplus amid economic slowdowns and reduced demand for semiconductor-based products. However, there are optimistic signals for industry recovery in the near future, fueled by growing demand for consumer electronics such as smartphones.

Looking ahead, SMIC forecasts its revenue for the first quarter of 2024 to remain flat or increase by up to 2 percent sequentially, with a projected gross margin ranging from 9 percent to 11 percent. This anticipated gross margin is lower than the 16.4 percent reported in the fourth quarter of 2023.

Notably, SMIC gained international attention last year following reports that the company played a role in developing advanced chips for Huawei, one of China’s leading smartphone manufacturers, Reuters news report said. These chips were utilized in Huawei’s Mate 60 smartphone series, launched in August 2023, underscoring SMIC’s significance in China’s semiconductor ecosystem.

Baburajan Kizhakedath