2022 Third Quarter Highlights
- Revenue was $1,907.0 million in 3Q22, an increase of 0.2% QoQ from$1,903.2 million in 2Q22, and 34.7% YoY from $1,415.3 million in 3Q21.
- Gross profit was $742.2 million in 3Q22, compared to $750.5 million in 2Q22, and 58.6% YoY from $467.9 million in 3Q21.
- Gross margin was 38.9% in 3Q22, compared to 39.4% in 2Q22 and 33.1% in 3Q21.
Fourth Quarter 2022 Guidance
The following statements are forward looking statements based on current expectations and involved risks and uncertainties. The Company expects (in accordance with IFRS):
- Revenue to decrease by 13% to 15% QoQ.
- Gross margin to range from 30% to 32%.
SMIC management commented: "The third quarter's revenue was $1,907 million, with a slight decrease in shipment and a small increase in blended ASP due to product mix optimization, therefore the revenue remained flat comparing to the previous quarter. Externally, demand declined and internally, some fab conducted annual maintenance, while the monthly capacity increased by 32 thousand 8-inch equivalent wafers, thus the capacity utilization was 92.1%, down five percentage points from the previous quarter. Combining the above factors, gross margin for the third quarter was 38.9%, down 0.5 percentage points sequentially.
In the fourth quarter, due to the weak demand in the mobile phone and consumer market, and overlapping with the impact from that some customers need time to interpret the newly released US export control rules, the Company's revenue is expected to decline by 13% to 15% sequentially, with gross margin in the range of 30% to 32%. According to the results of the previous three quarters and the mid-point of guidance for the fourth quarter, the Company's full year revenue is expected to be around $7.3 billion, up around 34% year-over-year, and gross margin is expected to be around 38%. The capital expenditure plan this year is revised upwards from $5.0 billion to $6.6 billion.
About the recently updated and revised export control rules by the United States, according to a preliminary interpretation, the new rules have an adverse impact on our production and operation. We have maintained close communications with suppliers, while the clarification of some definitions in the new rules and the assessment of impact on the Company are still in progress.
Based on the current macroeconomic trends and the pace of de-stocking, we have yet to see signs of recovery in the industry. The adjustment may last longer as this cycle is overlaid with multiple complex external factors. The development of the Company is inseparable from seizing the momentum when the industry is booming, and even more inseparable from persistence and patience when the industry is going through a difficult time. We are still full of confidence in the Company's medium-to long-term development."
To see the complete results including financial tables, please click here:
https://smic.shwebspace.com/uploads/636cd68f/Q322_EN.pdf
Date: Friday, November 11, 2022
Time: 8:30 A.M. - 9:30 A.M.
WEBCAST
The call will be webcast live at:
https://edge.media-server.com/mmc/p/pd6di76b
CONFERENCE CALL
Please register in advance for the conference call at:
https://register.vevent.com/register/BI0aa19d1da9e54d33bedae5daa162081e
REPLAY
Recording will be available 1 hour after the event and it will be archived for 12 months.
https://www.smics.com/en/site/company_financialSummary
Semiconductor Manufacturing International Corporation (SEHK: 00981; SSE STAR MARKET: 688981) and its subsidiaries is one of the leading foundries in the world and is the front runner in manufacturing capability, manufacturing scale, and comprehensive service in the Chinese Mainland. SMIC Group provides semiconductor foundry and technology services to global customers on 0.35 micron to FinFET process node technologies. Headquartered in Shanghai, China, SMIC Group has an international manufacturing and service base, with three 8-inch wafer fabrication facilities (fabs) and three 12-inch fabs in Shanghai, Beijing, Tianjin and Shenzhen, and four 12-inch fabs under construction in Shanghai, Beijing, Shenzhen and Tianjin. SMIC Group also has marketing and customer service offices in the U.S., Europe, Japan, and Taiwan, China, and a representative office in Hong Kong, China.
For more information, please visit www.smics.com.
This release contains, in addition to historical information, forward-looking statements. These forward-looking statements are based on SMIC's current assumptions, expectations, beliefs, plans, objectives, and projections about future events or performance. SMIC uses words including but not limited to "believe", "anticipate", "intend", "estimate", "expect", "project", "target", "going forward", "continue", "ought to", "may", "seek", "should", "plan", "could", "vision", "goal", "aim", "aspire", "objective", "schedule", "outlook" and other similar expressions to identify forward looking statements. These forward-looking statements are necessary estimates reflecting judgment of SMIC's senior management and involve significant risks, both known and unknown, uncertainties and other factors that may cause SMIC's actual performance, financial condition or results of operations to be materially different from those suggested by the forward-looking statements including, among others, risks associated with cyclicality and market conditions in the semiconductor industry, intense competition in the semiconductor industry, SMIC's reliance on a small number of customers, timely wafer acceptance by SMIC's customers, timely introduction of new technologies, SMIC's ability to ramp new products into volume, supply and demand for semiconductor foundry services, industry overcapacity, shortages in equipment, components, raw materials and software, availability of manufacturing capacity, financial stability in end markets, orders or judgments from pending litigation, intensive intellectual property litigation in the semiconductor industry, general economic conditions and fluctuations in currency exchange rates.
In addition to the information contained in this release, you should also consider the information contained in our other filings with The Stock Exchange of Hong Kong Limited ("SEHK") and Shanghai Stock Exchange ("SSE") from time to time. Other unknown or unpredictable factors also could have material adverse effects on our future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated or, if no date is stated, as of the date of this release. Except as required by applicable laws, SMIC undertakes no obligation and does not intend to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the possible or actual occurrence of unanticipated events after the date on which such statement is made, whether as a result of new information, future events or otherwise.
To supplement SMIC's consolidated financial results presented in accordance with IFRS, SMIC uses the presentation of non-IFRS financial measures, including EBITDA, EBITDA margin and non-IFRS operating expenses in this release. The presentation of non-IFRS financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS. These non-IFRS financial measures are not calculated or presented in accordance with, and are not alternatives or substitutes for financial measures prepared in accordance with IFRS, and should be read only in conjunction with the Group's financial measures prepared in accordance with IFRS. The Group's non-IFRS financial measures may be different from similarly-titled non-IFRS financial measures used by other companies.
