Senior executives of SMIC said that the memory market is in short supply and prices have risen significantly

SMIC is heading toward a record revenue year, this chip giant expects annual revenue to exceed $9 billion for the first time, and its production lines are operating at full capacity to meet strong demand.

On November 14, at the latest earnings conference, SMIC co-CEO Zhao Haijun stated that as the fourth quarter is a seasonal low, customer inventory buildup has slowed down, but the industrial chain iteration effect continues, with a "low season not being low", and the company's production lines remain in a state of insufficient supply.

According to estimates, SMIC's annual sales revenue is expected to exceed $9 billion.

Zhao Haijun said that the current memory market is in short supply, and prices have increased significantly. From the perspective of the foundry industry and the memory industry, the speed of capacity expansion in the industry next year will only increase, not decrease.

SMIC's latest published financial report shows that third-quarter revenue was 17.162 billion yuan, an increase of 9.9% year-over-year, and a gross profit margin of 25.5% saw a significant increase of 4.8 percentage points from the previous quarter, with the capacity utilization rate rising to 95.8%, approaching full production.

Core financial data as follows:

Q3 Revenue: 17.162 billion yuan, up 6.9% quarter-over-quarter and 9.9% year-over-year; the total revenue for the first three quarters was 49.51 billion yuan, up 18.2% year-over-year;

Q3 Gross Profit Margin: 25.5%, up 4.8 percentage points from the previous quarter; the gross profit margin for the first three quarters was 23.2%, up 5.6 percentage points year-over-year;

Q3 Net Profit Attributable to Shareholders: 1.517 billion yuan, up 43.1% year-over-year; the net profit attributable to shareholders for the first three quarters was 3.818 billion yuan, up 41.1% year-over-year;

Capacity Utilization Rate: 95.8%, up 3.3 percentage points from the previous quarter.

However, the guidance provided by SMIC's management for the fourth quarter indicates that revenue will remain flat or grow by 2% quarter-over-quarter, with a gross profit margin of 18%-20%. This means that, given the high capacity utilization rate of 95.8%, the company expects a significant slowdown in revenue growth for the fourth quarter, and the mid-point of the gross profit margin of 19% will drop by about 6 percentage points compared to the 25.5% in the third quarter.

Zhao Haijun mentioned that the decline in SMIC's fourth-quarter performance guidance is mainly due to the traditional off-season and fluctuations in the mobile phone market. Due to the shortage of memory supply and price increases, industries such as mobile phones and network communication equipment have been cautious in purchasing, leading to relatively conservative forecasts for shipments in the next two quarters. He also revealed that to meet urgent orders for memory and analog products, the company postponed the shipment of some mobile phone products in the third quarter.

Original: www.toutiao.com/article/1848734942561289/

Statement: The article represents the views of the author himself.