SMIC reported its financial results for 2023, and due to the industrial downturn, sales and profit declined for the reporting period. SMIC plans to navigate 2024 steadily and stably.
According to SMIC's financial results, its annual sales for 2023 fell by 8.61% to CNY45.25 billion (US$6.32 billion). Gross margin fell by 16.4 percentage points to 21.9%, and net income was slashed by over 60%.
SMIC's revenue from foundry services amounted to CNY40.875 billion, representing a 9.8% decrease compared to the previous year. SMIC's average utilization rate stood at 75% in 2023.
According to SMIC, the semiconductor industry experienced a downturn in 2023 due to global economic weakness and sluggish market demand. While there were hints of improvement in device demand later in 2023, excess inventory meant the industry was mainly focused on clearing stockpiles throughout 2023.
Looking ahead to 2024, SMIC stated that the company still faces macroeconomic conditions, geopolitical issues, competition, and excess inventory. The company anticipates moderate performance, gradually emerging from the slump alongside the semiconductor industry chain.
However, overall market demand recovery is insufficient to support a comprehensive and robust rebound. According to SMIC's guidance for 2024, revenue growth will not be lower than the industry average, with a year-on-year growth rate in the mid-single digits.
SMIC plans to continue advancing its announced 300mm factory and capacity expansion plans in 2024. SMIC anticipates flat growth in capital expenditures in 2024, which was at CNY58.84 billion in 2023.
According to SMIC, the global semiconductor industry exhibits both cyclical and growth characteristics in the medium to long term, with short-term supply-demand imbalances not expected to affect the industry's overall positive outlook.
SMIC disclosed that in 2023, revenue from its largest customer and top five customers totaled CNY669.09 million and CNY1.65 billion, representing 15.0% and 37.1% of the annual revenue from primary operations, respectively. Additionally, procurement expenditures with its primary and top five material suppliers amounted to CNY974.7 million and CNY3.29 billion, respectively, constituting 9.6% and 32.5% of its annual raw material procurement.
SMIC financial summary (CNYm) | |||
Financial | 2022 | 2023 | Change (%) |
Sales | 49,516.08 | 45,250.43 | -8.61 |
Gross margin (%) | 38.30 | 21.90 | Pct change: -16.4 |
R&D spending | 4,953.03 | 4,991.55 | 0.78 |
Net income | 12,133.08 | 4,822.81 | -60.25 |
Source: SMIC, March 2024
SMIC sales by geography (%) | |||
Geography | 2022 | 2023 | Pct point change |
China | 74.2 | 80.1 | 5.9 |
US | 20.8 | 16.4 | -4.4 |
Others | 5 | 3.5 | -1.5 |
Source: SMIC, March 2024
SMIC sales by application (%) | |||
Application | 2022 | 2023 | Pct point change |
Smartphone | 27 | 26.7 | -0.3 |
Computer and Tablet | 17.5 | 26.7 | 9.2 |
Consumer electronics | 26.7 | 25 | -1.7 |
Connectivity and IoT | 18 | 12.1 | -5.9 |
Industrial and Automotive | 10.8 | 9.5 | -1.3 |
Source: SMIC, March 2024
SMIC sales by size (%) | |||
Size | 2022 | 2023 | Pct point |
200mm | 33 | 26.3 | -6.7 |
300mm | 67 | 73.7 | 6.7 |
Source: SMIC, March 2024
