SMIC‘s second quarter revenue increased year on year

Detailed explanation of financial report

    The proportion of SMIC‘s revenue by application in the second quarter was 25.4% for smart phones, 16.2% for smart homes, 23.8% for consumer electronics and 34.6% for others. Looking at the proportion of revenue contribution of various regions, the revenue from mainland China and Hong Kong is still the highest, reaching 69.4% in this quarter; The proportion of North America is 18.9%, and that of Eurasia is 11.7%.

    Classified by wafer size, the revenue of 8-inch wafers accounted for 31.7% in the second quarter, and the revenue of 12 inch wafers increased slightly to 68.3%. In terms of capacity, the monthly capacity of SMIC in the second quarter of 2022 increased from 649125 8-inch equivalent wafers in the first quarter of 2022 to 673750 8-inch equivalent wafers, and the capacity utilization rate remained high, reaching 97.1%.

    SMIC also pointed out in its financial report that the capital expenditure in the second quarter of 2022 was US $1672.3 million. The annual capital expenditure planned for this year is about US $5 billion, which will be used to promote the expansion of old plants and three new plants. Meanwhile, the financial report shows that the company‘s R & D investment in the second quarter was about 187.5 million US dollars, up 31.1% year-on-year.

    The cycle adjustment will continue until the first half of next year, and I am full of confidence in medium - and long-term growth

    According to the management of SMIC, in the second quarter of this year, the company‘s sales revenue exceeded US $1.9 billion, an increase of 3.3% month on month. Both the shipment volume and the average sales unit price increased slightly. The capacity utilization rate was 97.1%, and the gross profit rate was 39.4%. However, due to the control of the epidemic on personnel flow, the annual repair of some factories was not carried out in the second quarter, making the overall impact of the epidemic on output lower than expected. Therefore, the revenue and gross profit rate of the current quarter slightly exceeded the guidelines.

    At present, this round of cycle adjustment will last at least until the first half of next year. However, it is certain that the demand growth of the integrated circuit industry and the trend of global regionalization remain unchanged. Although there are short-term adjustments, the long-term logic of local manufacturing remains unchanged. SMIC said that it is still full of confidence in the medium and long-term growth of the company.

    In the first half of the year, SMIC‘s capital expenditure totaled US $2.5 billion, increasing the monthly capacity of 53000 chips equivalent to 8 inches. The progress was in line with expectations, and the new plant project was also promoted as planned.

    Looking forward to the third quarter, SMIC said that its sales revenue is expected to grow by 2% month on month, and its gross profit margin is between 38% and 40%.