China’s biggest foundry SMIC sees profits fall by one-fourth on waning demand for electronic gadgets
- Profits fell over 26 per cent year on year to US$425.5 million in the December quarter, after SMIC warned earlier about weaker electronics demand
- SMIC reported full-year sales growth of 34 per cent, but it expects the global chip industry to remain at the bottom of the cycle in the first half of 2023
Semiconductor Manufacturing International Corp (SMIC), China’s top contract chip maker, said its profits declined by more than one-fourth in the fourth quarter, as falling consumer demand in smartphones and laptop computers weighs on the industry.
During the three months ended December 31, profits fell over 26 per cent year on year to US$425.5 million, the Hong Kong and Shanghai-listed foundry reported on Thursday. Quarterly revenue reached US$1.6 billion, down 15 per cent from the previous quarter, but up 2.6 per cent from a year earlier.
Total revenue for 2022 increased nearly 34 per cent to US$7.27 billion, compared with US$5.44 billion in 2021, SMIC said.
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SMIC said in November that it expected weaker demand for consumer electronics to weigh on its business outlook through the first half of 2023.
Around the world, the semiconductor industry has been facing strong headwinds, with global semiconductor sales dropping nearly 15 per cent year on year to US$130.2 billion in the fourth quarter, according to data from the Semiconductor Industry Association.