China's Largest Foundry SMIC Posts Highest Sales Ever Despite US Sanctions

Despite the strengthening of US semiconductor sanctions, Chinese foundry company SMIC's annual sales have been revealed to have reached an all-time high.



SMIC [Photo = SMIC homepage]



Taiwanese economic media Commercial Times reported on the 12th that SMIC's annual sales last year were 11.6715 trillion won (8.03 billion dollars).



This is the first time that SMIC's annual sales have exceeded 8 billion dollars.



In the fourth quarter of last year, sales increased 31.5% year-on-year to 3.2986 trillion won (2.27 billion dollars). However, net profit decreased 38.4% to 156.9 billion won (108 million dollars). Citing



an economic expert, Commercial Times explained that the US's sanctions on Chinese semiconductor exports actually worked to its advantage, saying, "Despite the fact that the US imposed new (artificial intelligence) AI chip sanctions on 120 countries in January, these sanctions have made SMIC's products the only option in China."



In particular, Huawei, SMIC's major customer in China, recorded sales of over 171.907 trillion won (118.3 billion dollars) last year, setting the second highest record despite US sanctions.



However, SMIC's annual net profit last year was recorded at 716.4 billion won (493 million dollars), a 45.4% decrease. Some analysts say this is because SMIC shouldered high costs for the mass production of Huawei's 7nm chips.



SMIC expects its sales in the first quarter of this year to grow 6-8% compared to the previous quarter, with a gross margin of 19-21%. SMIC aims to achieve sales growth above the industry average this year and maintain expenditures at around 7.33 billion dollars.



According to TrendForce, SMIC ranked third in the foundry market in terms of sales in the third quarter of 2024, with a market share of 6%, following TSMC (69.4%) and Samsung (9.3%).





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