Semiconductor major SMIC Posts Robust Q2 2023 Results Amidst Industry Dynamics

Semiconductor Manufacturing International Corporation (SMIC), a global semiconductor powerhouse, has unveiled its second-quarter financial results for the period ending June 30, 2023. The company’s performance highlights a strategic resilience in a dynamic semiconductor landscape.
SMIC at a trade eventIn a period marked by both challenges and opportunities, SMIC has reported a revenue of $1,560.4 million for Q2 2023, marking a 6.7 percent sequential increase from the previous quarter, which recorded revenue of $1,462.3 million. This growth trajectory is underpinned by a keen focus on operational excellence and strategic positioning in a rapidly evolving market.

However, compared to the corresponding quarter in the previous year, Q2 2023 revenue reflects a decrease, with the same period in 2022 reporting $1,903.2 million. This year-on-year variance is indicative of broader industry dynamics and supply chain challenges that have marked the semiconductor landscape over the past year.

How nations contributed to SMIC revenue

China 79.6%
America 17.6%
Eurasia 2.8%

How industries contributed to SMIC revenue

Smart Phone 26.8%
Internet of Things 11.9%
Consumer Electronics 26.5%
Others 34.8%

During the second quarter of 2023, SMIC’s gross margin experienced a slight dip of 0.5 percentage points to 20.3 percent, resulting in a gross profit of $316.5 million. While this represents a marginal increase from the previous quarter’s gross profit of $304.7 million, it underscores the ongoing adjustments necessary to navigate industry complexities.

The market dynamics observed during the second quarter reflect varying demand patterns, as SMIC observed a robust capacity demand for 12-inch wafers, while the demand for 8-inch wafers remained subdued. Despite this, SMIC managed to maintain a utilization rate for 8-inch wafers that surpassed industry averages, signifying the company’s operational resilience.

SMIC has revealed that its capital expenditure was $ 1,731.5 million in 2Q23, compared to $1,258.6 million in 1Q23.

For the upcoming third quarter, SMIC projects a continued upward trajectory. The company anticipates a revenue growth ranging from 3 percent to 5 percent sequentially, a testament to its proactive approach to adapt to market demands. Correspondingly, SMIC expects the gross margin for the third quarter to range between 18 percent and 20 percent, indicative of its commitment to sustaining profitability while navigating industry dynamics.

As the company readies itself for the next phase of growth, SMIC remains steadfast in its commitment to research and development, product innovation, and platform advancement. In its statement, the company reiterated its focus on technological advancements, rapid product verification, and swift capacity deployment to seize future growth opportunities.

SMIC’s performance in Q2 2023 reflects its adaptability and strategic approach to the ever-changing semiconductor landscape. With an optimistic outlook for the rest of the year, the company’s efforts to strengthen its position in the industry continue to position it as a formidable player in the global semiconductor ecosystem.