Hua Hong Semiconductor, one of China's top wafer foundries, reported a steep profit drop for the first three quarters of 2025, citing higher costs from new production lines and rising R&D expenses. Third-quarter revenue rose 21.1% year-over-year to CNY4.566 billion (approx. US$640.9 million), while net profit plunged 43.5% to CNY177 million. For the first three quarters, revenue totalled CNY12.583 billion, up 19.8%, but profit tumbled 56.5% to CNY251 million.
Hua Hong attributed the earnings decline to higher fixed costs, including depreciation, utilities, and labour, from ramping up new capacity, along with continued R&D spending that further pressured gross margins.
For the fourth quarter, Hua Hong forecasts revenue of US$650–660 million, with a gross margin in the range of 12-14%.
Hua Hong also announced a leadership reshuffle ahead of its November 6 board meeting. Chairman Tang Junjun stepped down from all posts, while CEO Bai Peng took over his roles and became the company's new legal representative, consolidating executive control.
Hua Hong plans to acquire a stake in Shanghai Huali Microelectronics Corporation (HLMC) and raise supporting funds for the transaction. Once completed, HLMC will become a Hua Hong subsidiary.
The company reported impairment losses for the first three quarters, including CNY5.1 million in credit losses, CNY864 million in asset impairments, and the reversal of CNY811 million previously recognised. These adjustments cut pretax profit by about CNY58.5 million.
Hua Hong focuses on mature specialty process technologies, including embedded and standalone non-volatile memory, power devices, analog and power management, logic, and RF components. Its products are used across sectors such as new energy vehicles, green energy, and the Internet of Things.
Article edited by Jack Wu
