Semiconductor Manufacturing International Corporation (SMIC) ,China’s top chipmaker, reported better-than-expected revenue of $1.903 billion in Q2, up by 3.3 percent from Q1 and up 41.6 percent year-on-year.
Meanwhile, second quarter profit attributable to owners was $514.33 million, a decline of 25.2 percent from the year before.
Industry observers said the results were better than expected and that they indicated strong resilience despite the US’ tightened crackdown on China’s chip sector.
The net income of $514.3 million, even though showed a decline from last year, still beats analysts’ average estimates of $469.5 million.
“Due to the limitations on people’s movement as a result of the epidemic, some of the fabs did not conduct annual maintenance in the second quarter, causing the overall impact of the epidemic on output to be lower than expected, so revenue and gross margin in the quarter slightly exceeded guidance,” SMIC said in a filing.
SMIC spent a total of $2.5 billion on capital expenditure and increased its 8-inch equivalent capacity by 53,000 wafers per month for the first-half of the year. The chipmaker said “this is in line with expectations, and the new projects are progressing as planned.”
“At present, it seems that this cycle of adjustment will last at least until the first half of next year. However, what is certain is that the IC industry’s demand growth and global localization trend as well as the long-term logic of indigenous manufacturing remains unchanged, although there are short-term adjustments. We remain confident in the company’s medium- to long-term growth,” the statement said.
SMIC said it expects revenue for the third quarter to be flat to up to 2 percent from the second quarter and for gross margin to range from 38 percent to 40 percent.
The chipmaker said in a separate filing that Tudor Brown, the former president of Arm, has resigned from the board, whilst Zhao Haijun has also resigned as an executive director, but will remain as co-CEO.
To recap, the top chipmaker of China reported revenue of $1.842 billion for the first quarter of this year, up 66.9 percent year-over-year, and net income of $447 million, up 181.5 percent year-over-year. In 2021, SMIC reported sales revenue of $5.4 billion, up 39.3 percent annually, making it the fastest-growing among the top four pure-play foundries in the world that year.
