SMIC profit plunges 45pc as trade tensions surge

Agence France-Presse

China's top chipmaker SMIC (0981) said yesterday its 2024 profit had plunged significantly from the previous year, against a backdrop of surging trade tensions between Beijing and Washington.

China has been seeking in recent years to shore up its self-reliance in the increasingly vital field of semiconductors, and Shanghai-based SMIC is the country's chipmaking champion.

The firm faces pressure from Washington, which has taken steps in recent years to cut off China's access to advanced US technology, working with its allies to impose tough restrictions on the flow of state-of-the-art chips and the equipment needed to make them.

"Unaudited profit attributable to owners of the Company was US$492.7 million (HK$3.84 billion) in 2024," SMIC reported in a filing to the Hong Kong Stock Exchange.

The figure represented a decrease of 45.4 percent from US$902.5 million in 2023, according to the firm, which added that the fall was "mainly due to the decrease of investment income and financial income."

Profit in the final quarter of 2024 also slumped, the filing showed, dropping 38.4 percent year-on-year to US$107.6 million.

SMIC's fourth-quarter revenue, meanwhile, grew 31.5 percent to reach a total of US$2.2 billion, it added.

Unaudited revenue for the whole of last year reached US$8 billion, up from US$6.3 billion in 2023.

Looking forward, the firm said it anticipates sequential revenue growth of 6 to 8 percent during the first quarter of this year.

SMIC also said that "based on the premise that there are no significant changes in the external environment", it expects revenue growth in the year ahead "to be higher than industry average in the same markets."