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[Industry Information] SMIC's mid-term revenue increased by 11.5% year-on-year, 14nm technology made significant progress

2020-09-19

On August 30, SMIC announced its 2018 interim results. Revenue increased by 11.5% year-on-year to US$1.722 billion; gross profit increased by 5.6% year-on-year to US$438 million; profit attributable to shareholders decreased by 23.7% year-on-year to US$80.976 million; The income is 0.02 USD.


According to the announcement, SMIC’s revenue growth from customers in China accounted for 56.3% of the total revenue excluding technology licenses. Compared with 46% in the same period in 2017, revenue increased by 23.9%. Excluding the recognition of technology licensing revenue, sales were approximately US$1.561 billion, mainly due to the increase in wafer shipments during the period.


In addition, SMIC's gross profit margin decreased to 25.4% from 26.9% in the same period last year. Excluding the recognition of technology licensing revenue, the gross profit margin decreased from 26.9% in the same period of the previous year to 17.8%, mainly due to changes in product mix and decline in average selling prices during the period.


It is worth noting that during the reporting period, SMIC made significant progress in the development of 14nm FinFET technology. SMIC’s first-generation FinFET technology research and development has entered the customer introduction stage. SMIC is currently in the process of customer evaluation, IP calibration and reliability certification. SMIC’s FinFET technology strives to start risk production in the first half of next year.


SMIC’s 14nm FinFET process has always attracted market attention. Dr. Liang Mengsong, Joint Chief Executive Officer of SMIC, said before, “Since joining the board of directors, I have mainly focused on the research and development of FinFET technology, which is the key to advanced computing applications. We have adjusted the SMIC FinFET technology. Development plans, and have seen greater progress in equipment performance, I believe SMIC’s FinFET solutions will be extremely competitive."


In addition, SMIC’s 28nm HKC+ technology development has also been completed. 28nm HKC continues to increase in volume, and the yield has reached industry standards. In view of the completion of the 28nm HKC+ technology development, SMIC will conduct trial production at the end of this year.


With regard to 28nm, with the completion of the development of 28nm HKC+ technology, 28nm HKC continues to increase in volume and the yield rate increases. It is expected that revenue in this area will also increase. As of the first quarter of this year, SMIC’s 28nm revenue has declined. At that time, Liang Mengsong said that the reason for this situation is that for the smartphone industry, the first quarter is the traditional off-season, and 28nm products are mainly aimed at smartphones and other products, so it will have a greater impact on 28nm. He pointed out that as the market recovers, 28nm will return to high single-digit levels.


Source: Flash Market WeChat Official Account, thank you!


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