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SMIC releases Q4 2020 financial report & guidance for Q1 2021

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China’s Semiconductor Manufacturing International Corporation (SMIC) has announced its unaudited results for the last three months of the last year which ended on December 31, 2020. The fourth-quarter earnings call shows that the firm raked in US$981.1 million which is a slight drop from the US$1,082.5 million accrued in the third quarter of 2020. However, it is slightly higher than the US$839.4 million generated from sales of semiconductors in the fourth quarter of 2019.SMIC

SMIC was one of the firms affected by Donald Trump’s obnoxious ban on Chinese companies from using US technology. The ban has no doubt affected the brand’s ability to meet up with orders but SMIC is optimistic that its revenue will grow in Q1 2021 by 7% to 9% QoQ. Also, the chipmaker expects gross margin to range from 17% to 19%.

Gross profit in the fourth quarter of 2020 was US$176.8 million, compared with US$262.0 million in the third quarter of 2020 and US$199.4 million in the fourth quarter of 2019.

The gross profit margin in the fourth quarter of 2020 was 18.0%, compared with 24.2% in the third quarter of 2020 and 23.8% in the fourth quarter of 2019.

Dr. Gao Yonggang, Chief Financial Officer of SMIC commented:

“The Company’s revenue in the fourth quarter of 2020 was US$981 million, and gross margin was 18.0%. Multiple full-year financial metrics for the Company (unaudited) hit record highs. Annual revenue was US$3,907 million, a growth of 25.4%; gross profit was US$921 million, a growth of 43.3%; profit attributable to the company was US$716 million, an increase of 204.9%; and EBITDA was US$2,123 million, a growth of 54.6%.

Looking to 2021, as SMIC was placed on the US Entity List, the Company is restricted from procuring related US items or technologies; so, there are risks and uncertainties to our annual forecasts. The forecast we give today assumes that operational continuity is not significantly adversely affected. Export license application processes must be followed, they take time and will face uncertainty. Based on the above, our targets and plan for 2021 are as follows: our annual revenue target is mid-to-high single-digit percentage growth; revenue target for 1st half is around $2.1 billion, and annual gross margin target is in the mid-teens range.”

Dr. Haijun Zhao and Dr. Liang Mong Song, Co-CEOs of SMIC commented:

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“At present, the foundry industry capacity is tight, the demand for non-FinFET processes remains strong, and our capacity for non-FinFET will continue to be fully loaded. In order to meet customer needs, the Company expects capital expenditures this year to be US$4.3 billion, in which the majority is for non-FinFET capacity expansion and the remaining for FinFET, the infrastructure of the new Beijing joint-venture project, and etc. In terms of capacity expansion, we increase monthly non-FinFET capacity by 10,000 for 12-inch, and not less than 45,000 for 8-inch this year. Given the impact of being added to the Entity List, we will consider strengthening the development and deployment of our first and second-generation FinFET multi-platforms and expand the reliability and competitiveness of our platforms.”

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