China’s Leading Chipmaker SMIC Sees Q4 Revenue Increase 53.8% YoY

On Thursday, Chinese chipmaker Semiconductor Manufacturing International Corporation (SMIC) released its latest performance report. According to the document, the company’s revenue in the fourth quarter of 2021 was 10.26 billion yuan ($1.62 billion), a year-on-year increase of 53.8%, hitting a record high. Meanwhile, gross profit was 3.352 billion yuan, a year-on-year increase of 134.1%, and the gross margin was 32.7%, compared to 21.5% in the previous year.

The announcement also shows that SMIC’s operating profit in the fourth quarter of last year was 4.092 billion yuan, a year-on-year increase of 248.9%, while profit attributable to owners of the company was 3.414 billion yuan, a year-on-year increase of 172.7%.

Regarding these significant improvements, the company explained that, on the one hand, growth was primarily attributable to an increase in wafer sales, product-mix changes and an increase in average selling; On the other hand, income from investing in associated enterprises and financial assets increased during the period. Moreover, SMIC just bought new property in the Pingshan District of Shenzhen for 20.1 million yuan in December last year, which will be used to build an original equipment manufacturing (OEM) plant for 12-inch wafers.

The company also showed the financial situation for the whole year of 2021 in its financial report. Unaudited revenue in 2021 was 35.6 billion yuan, and the unaudited profit attributable to owners of the company in 2021 was 10.7 billion yuan.

The company said that in 2021, the global shortage of chips and strong demand for local and indigenous manufacturing brought the company a rare opportunity, while restrictions of the US government’s “Entity List” set many obstacles to the company’s development.

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The company expects revenue to increase by 15%-17% on a quarterly basis, and its gross margin to range from 36%-38%. Capital expenditure is expected to be about $5.0 billion, and the incremental production capacity is expected to be higher than last year.