Beijing (Reuters)-International conductivity manufacturer (0981.hk), the largest chip maker in China, informed a 38.4 % decrease on an annual basis in the fourth quarter profits.
The profit attributed to SMIC owners amounted to $ 107.6 million in the quarter to the quarter of October to December, compared to the estimate of analysts of $ 193.45 million, according to LSEG data.
Revenue increased by 31.5 % to $ 2.2 billion, compared to market expectations of $ 2.18 billion, according to LSEG.
SMIC still focuses on a overwhelming majority on mature knot chips for consumer electronics and home appliances, with advanced manufacturing projects such as Huawei smartphones, which only represent a marginal part of their revenues.
Since US export controls restrict access to advanced chip industry technology, Chinese causes, including SMIC, have intensified their focus on this sector.
This shift has yielded, as Chinese manufacturers gradually obtained the market share in the ripe knots, which is a challenge of heading players such as Powerchip Tiny.
SMIC has increased capital investments over the past few years to expand its productive capacity and enhance the capabilities of semi -local conductors in China.
Its capital expenses rose to $ 7.3 billion in 2023 from $ 4.5 billion in 2021, reflecting the aggressive expansion strategy. The company invested another $ 7.33 billion in 2024, according to its latest release in profits.
Heavy spending pressed profitability, as the total SMIC margin decreased to about 20 % in 2023 from more than 30 % in 2021-2022.
SMIC reported a total margin of 22.6 % in the fourth quarter of 2024, compared to 16.4 % in the previous year.
(He participated in the reports of Liam Mu and Brenda Goh, edited by Louise Hofns)
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