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Chinese Chipmaker SMIC Gains After Reporting 173% Leap in Fourth-Quarter Profit
Zhang Yushuo
DATE:  Feb 11 2022
/ SOURCE:  Yicai
Chinese Chipmaker SMIC Gains After Reporting 173% Leap in Fourth-Quarter Profit Chinese Chipmaker SMIC Gains After Reporting 173% Leap in Fourth-Quarter Profit

(Yicai Global) Feb. 11 -- Shares of Semiconductor Manufacturing International Corporation rose after China’s biggest chipmaker said profit soared 173 percent in the final quarter of last year from a year earlier, making it the fastest growing of the world’s top four pure-play foundries.

SMIC [HKG: 0981] ended 2.5 percent up at HKD20.15 (USD2.58) in Hong Kong today, after earlier jumping as much as 4.3 percent. Its Shanghai-listed shares [SHA: 688981] rose 0.5 percent to CNY51.46 (USD8.09).

Net profit was CNY3.41 billion (USD534 million) in the three months ended Dec. 31, according to the Shanghai-based company’s earnings report released yesterday.

SMIC’s profit growth outstripped that of rivals, with Taiwan Semiconductor Manufacturing Company posting 16.4 percent, United Microelectronics Corporation 42.5 percent, and US GlobalFoundries 108 percent. 

Revenue jumped 61 percent to USD1.6 billion due to the revision on the average selling price and the higher proportion of original equipment manufacturing targeting high-end wafers, SMIC said. China accounted for over two-thirds of the revenue.

Despite US sanctions that restrict American firms from doing business with SMIC, the company profited from strong domestic demand amid a global scarcity of semiconductors used in smartphones, personal computers, game consoles and cars that started in late 2020.

“The global shortage of chips and the strong demand for local and indigenous manufacturing brought the company a rare opportunity,” SMIC said of the full year.

Full-year net profit was CNY10.7 billion (USD1.7 billion), a 148 percent gain, while revenue jumped 29 percent to a record CNY35.6 billion (USD5.4 billion).

For the current year, SMIC predicted revenue to outperform the sector average if the external environment is relatively stable. To continuously expand existing plants and the roll out of three new projects, investment will remain high in 2022, the company added. it expects capital expenditure of about USD5 billion, with growth in production capacity to exceed last year’s.

SMIC’s top priority is to guarantee production, meet client needs, and alleviate the global chip shortage, it noted.

Editor: Futura Costaglione

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Keywords:   SMIC,Chips