Semiconductor Manufacturing International Corp (SMIC) (0981.HK) reported a 59.1% decline in net profit for the second quarter on Thursday, although the results from China’s largest chip foundry surpassed expectations.
SMIC posted an unaudited net profit of $164.6 million for the three months ending June 30, exceeding the $103.8 million anticipated by analysts surveyed by LSEG. Revenue for the quarter increased by 21.8% to $1.9 billion, also outperforming forecasts. These figures suggest signs of recovery in the global semiconductor industry, which has been in a downturn since late 2022.
Global semiconductor sales grew by 18.3% to $149.9 billion in the second quarter, with the Chinese market expanding by 21.6%, according to the Semiconductor Industry Association.
SMIC, which mainly manufactures basic chips for simpler electronics, recently drew attention when a teardown of a Huawei smartphone revealed an advanced chip made by SMIC—the most sophisticated produced in China to date. However, the company’s production of advanced chips is still limited, hindering its ability to fully leverage the AI boom that is driving growth for some competitors.
In contrast, industry leader TSMC reported a 40% increase in second-quarter revenue, driven by robust demand for advanced chips used in AI and high-performance computing.
Looking ahead, SMIC projected a 13% to 15% increase in revenue for the current quarter. The company’s capital expenditure for the quarter amounted to $2.25 billion.
