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SMIC’s 2024 revenue hits record high, but net profit declines
SMIC reported record 2024 revenue of RMB 57.8 billion ($8.07 billion), up 27.7% YoY, but a net profit decline of 23.3% to RMB 3.7 billion ($520 million). Despite a strong demand for semiconductors, declining average selling prices and increased competition pose challenges for 2025.
Key points
- Record revenue for 2024 at RMB 57.8 billion ($8.07 billion), up 27.7% YoY.
- Net profit down 23.3% YoY to RMB 3.7 billion ($520 million).
- Gross margin at 18.6% with capacity utilization at 85.6%.
- 8-inch wafer sales increased by 36.7% YoY to 8.021 million units.
- Average selling price decreased to RMB 6,639 ($927.31).
- Management forecasts ongoing recovery in global semiconductor demand driven by high-performance computing.
- Anticipation of increased competition and external uncertainties in 2025.
Why it matters
- SMIC's situation reflects larger trends in the semiconductor industry, particularly post-pandemic recovery.
- The decline in net profit amidst increasing revenue illustrates the pressures facing tech companies due to pricing and competition.
- The emphasis on high-performance computing aligns with the broader IT trend toward AI and machine learning, expected to significantly shape technology in 2025.
Despite record revenue growth, SMIC's declining net profit highlights the challenges of pricing pressures and competition in the evolving semiconductor landscape, reflecting broader trends in the tech industry as it heads into 2025.