Beijing (Reuters) -Semiconductor Manufacturing International Corp.0981.HK) China's largest contract chip maker reported 38.4% year -on -year in fourth quarter profit.
The profits attributable to SMIC owners reached $ 107.6 million in December quarter, compared to an analyst estimate of $ 193.45 million, according to LSEG data.
Revenue rose 31.5% to $ 2.2 billion, compared to market expectations of $ 2.18 billion, according to LSEG.
SMIC business continues to focus on overwhelming on mature goal chips for consumer electronics and home appliances, with advanced manufacturing projects such as Huawei smartphone chips that represent a peripheral proportion of its revenue only.
As US export controls limit access to advanced chip making technology, Chinese foundries including SMIC have intensified their focus on this segment.
The shift has paid off, with Chinese manufacturers gaining market share gradually in mature goal chips, challenging established players like Powerchip Taiwan.
SMIC has increased capital investments over the past few years to expand its production capacity and strengthen China's domestic conductors' capabilities.
Its capital expenditure rose to $ 7.3 billion in 2023 from $ 4.5 billion in 2021, reflecting its aggressive expansion strategy. The company invested another $ 7.33 billion in 2024, according to its latest earnings release.
Heavy expenditure has squeezed profitability, with Gross Smic profits declining to about 20% in 2023 from over 30% in 2021-2022.
Smic reported a gross edge of 22.6% in the fourth quarter of 2024, compared to 16.4% a year earlier.
(Reported by Liam Mo and Brenda Goh, edited by Louise Heavens)