SMIC Q2 Revenue Up 21.8% to $1.9B, Retains 3rd Globally

On August 8, 2024, Semiconductor Manufacturing International Corporation (SMIC), a premier semiconductor foundry in China, released its financial results for Q2 2024. The company achieved a notable revenue of $1.901 billion for the quarter, representing an 8.6% increase from the previous quarter and a 21.8% rise year-over-year. The gross profit margin for this period was 13.9%.

In comparison:

· TSMC's second-quarter revenue reached approximately NT$673.51 billion (around $20.80 billion), reflecting a significant 40.1% year-over-year increase.

· Samsung Electronics' Digital Solutions (DS) division, responsible for semiconductor business, generated revenue of KRW 28.56 trillion, a 94% increase from the previous year. Excluding memory chip revenue of KRW 21.74 trillion, the System LSI segment, which includes custom chips and foundry services, achieved revenue of KRW 6.82 trillion (about $4.96 billion).

· United Microelectronics Corporation (UMC) posted second-quarter revenue of NT$56.8 billion (about $1.75 billion), a 4% increase from the previous quarter and a 0.9% year-over-year growth.

· GlobalFoundries posted Q2 revenues of $1.63 billion, experiencing a 12% decline from the previous year.

Following a strong performance in Q1, where SMIC surpassed UMC and GlobalFoundries to become the world's third-largest foundry, the company continued its lead into Q2. In this quarter, 80.3% of SMIC's revenue came from the China region, 16% from the Americas, and 3.7% from Europe and Asia.

The revenue distribution by application was as follows: smartphones at 32%, computers and tablets at 13.3%, consumer electronics at 35.6%, internet and wearables at 11%, and industrial and automotive at 8.1%. Regarding wafer sizes, 12-inch wafers contributed 73.6% of the revenue, while 8-inch wafers made up 26.4%. SMIC's monthly production capacity increased from 814,500 8-inch equivalent wafers in Q1 to 837,000 in Q2. The company achieved a capacity utilization rate of 85.2% in Q2, with wafer sales reaching 2.111 million 8-inch equivalent wafers, reflecting a 17.7% increase from the previous quarter and a 50.5% year-over-year growth.

For Q2 2024, SMIC's capital expenditures totaled $2.251 billion, up from $2.235 billion in Q1, while R&D expenditures amounted to $181 million in Q1. The company's Q2 revenue and gross margin exceeded its guidance, with sales revenue reaching $1.9 billion, a 9% increase quarter-over-quarter. The company shipped over 2.11 million 8-inch equivalent wafers, an 18% sequential increase, though the average selling price decreased by 8% due to shifts in the product mix.

Looking forward to Q3 2024, SMIC projects a revenue increase of 13% to 15% quarter-over-quarter and expects the gross margin to range between 18% and 20%.