Revenue grew 21.8% and the trend is expected to continue this quarter.
In the second quarter, SMIC made a profit of $164.6 million, as noted Reuterswhich is about 60% more than the forecast value, and the company’s revenue for the period increased by 21.8% to $ 1.9 billion, also exceeding forecasts. However, in a year-on-year comparison, net profit decreased by 59.1%, and this is not a good sign. Capital expenditures in the last quarter reached $ 2.25 billion, they exceeded the company’s revenue with a large request.
Image source: Reuters
Of course, being the largest contract chip manufacturer in China, the company can earn money on the desire of Chinese developers for self-sufficiency and import substitution, but SMIC cannot make much money on the so-called boom of artificial intelligence systems, even if we take into account that it is the one that manufactures specialized chips for Huawei. Firstly, their production volumes are very small, and secondly, the cost of this type of product remains high. For comparison, Taiwan’s TSMC was able to increase its own revenue by 40% in the second quarter, largely due to high demand for components for artificial intelligence systems. In the current quarter, SMIC expects to increase revenue consistently by 13-15%.
