SMIC revenue up 4.8% to $831 mn thanks to China

Semiconductor Manufacturing International Corporation (SMIC) posted revenue of $831 million (+4.8 percent), gross profit of $220.2 million (–0.3 percent) and net income of $27 million in Q1 2018.

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China’s top contract chipmaker said its gross margin increased to 26.5 percent compared to 18.9 percent in 4Q17 and 27.8 percent in 1Q17.
SMIC semiconductorSMIC said its second quarter revenue will increase by 7-9 percent quarter-on-quarter with a gross margin of 23-25 percent.

SMIC said 6.8 percent revenue came from Computer, 33.6 percent from Communications, 35.6 percent from Consumer, 8.5 percent from Auto/Industrial and 15.5 percent from other business areas.

North America contributed 28.6 percent, China 62.4 percent and Eurasia 9 percent revenue to SMIC in the first quarter.

SMIC revenue from the China region grew 28 percent sequentially and 40 percent year over year.

“We accelerate the development of our technology, aiming to build up complete technology platforms, which integrate competitive technology, ready-to-use IP, and comprehensive design services, in order to increase competitiveness and capture the needs of customers,” Zhao HaiJun and Liang Mong Song, co-chief executive officers of SMIC, said.

SMIC is the world’s No. 4 contract chipmaker by revenue, trailing Taiwan Semiconductor Manufacturing, Globalfoundries and United Microelectronics. State-backed SMIC plays an important role in China’s ambition to boost its own chip industry and cut dependence on foreign suppliers especially from the U.S.

China’s overseas shopping spree to strengthen its chip sector and slash reliance on products from Intel, Qualcomm, Samsung Electronics, SK Hynix, Toshiba, TSMC and MediaTek has struggled to gain traction, Nikkei reported.

Failed deals, including Beijing-backed Tsinghua Unigroup’s failed bid for Micron, Western Digital and three Taiwanese chip assemblers — Siliconware Precision Industries, Powertech Technology and ChipMOS Technologies — highlight China’s woes in the global semiconductor market.