SMIC's Q2 profit jumps fourfold to US$687m

Semiconductor Manufacturing International Corporation (0981) said its second-quarter net profit rose nearly four times to US$687.8 million (HK$5.36 billion), thanks to rising wafer shipment and higher selling prices amid a global chip shortage.

SMIC's revenue rose 43.2 percent to US$1.34 billion yuan last quarter from a year ago, or 21.8 percent on a quarterly basis. The gross profit margin was up 7.4 percentage points to 30.1 percent from the first quarter and 3.6 percentage points higher than the same period last year. The largest Chinese semiconductor foundry expects third-quarter revenue to rise by 2 percent to 4 percent quarterly. And gross profit margin is projected to grow around 32 to 34 percent.

SMIC also raised its annual revenue growth target to 30 percent for 2021, with a gross margin target of 30 percent.

"The company still faces impacts brought by the entity list and there are still uncertainties with our expectations in indicators," said chief financial officer Gao Yonggang.

SMIC has been added to a blacklist of alleged Chinese military companies by the United States last December.

The shipment of 8-inch equivalent wafers last quarter rose 12 percent to 1.75 million quarter-on-quarter, with a utilization rate of 100.4 percent.

The monthly capacity of 8-inch equivalent wafers increased by 38.37 percent to 561,500 from a quarter ago, primarily due to the capacity expansion in 200 mm fabs.

SMIC said its capital expenditures rose 44.32 percent quarter-on-quarter to US$770.8 million in the second quarter.

The company set its capital spending target at US$4.3 billion for 2021. The majority of funds will be for mature technology capacity expansion, while the remaining is for advanced technology as well as the infrastructure of the new Beijing joint-venture project, it said.