SMIC 2022 net profit of 12.3 billion yuan! Making money is the first goal

This year, SMIC announced its unaudited results for the fourth quarter and full year ended December 31, 2022.

For the fourth quarter of 2022, SMIC reported revenue of $1,621.3 million (approximately RMB 10.99 billion), a decrease of 15.0% sequentially and an increase of 2.6% year over year; gross profit of $518.0 million, a decrease of 30.1% sequentially and a decrease of 6.2% year over year; and gross margin of 32.0%, a decrease of 6.9 percentage points sequentially and a decrease of 3.0 percentage points year over year.

Full year 2022 revenue was $7,273.3 million (approximately RMB49.29 billion), an increase of 33.6% compared to $5,443.1 million in 2021.

Full year 2022 profit attributable to owners of the Company of $1,817.9 million (approximately RMB12.32 billion), an increase of 6.8% compared to $1,701.8 million in 2021.

SMIC said its fourth quarter 2022 results were in line with the company's assessment and guidance, with full year 2022 revenue exceeding $7.2 billion and achieving two consecutive years of over 30 percent growth in 2021 and 2022, and annual gross margin reaching a new all-time high of 38 percent.

In 2022, SMIC's capital expenditures of $6.35 billion will result in a monthly 8-inch capacity of 714,000 wafers by the end of the year, with an annual capacity utilization rate of 92 percent.

By the end of 2022, SMIC Shenzhen will start production, SMIC Beijing will start pilot production, SMIC Lingang will complete the topping out of the main structure and SMIC Xiqing will start civil construction.

Among them, SMIC Capital is expected to delay mass production by one to two quarters due to delayed delivery of bottleneck equipment.

Looking ahead to 2023, the industry cycle is still at the bottom in the first half, and the impact of external uncertainties remains complex.

Looking ahead, SMIC expects Q4 2023 revenue to decline 10-12% sequentially and gross margin to be 19-21%.

For the full year 203, revenue is expected to decline in the low teens (i.e., in the 10-15% range) and gross margin is expected to be around 20%; depreciation is expected to increase by more than 20% year-on-year and capital expenditures are expected to be essentially the same as in 2021; and capacity additions by the end of 2023 are expected to be similar to those in 2022.

SMIC also emphasized that the gross margin will be under high depreciation pressure during the continuous investment process, and the company will always aim for sustainable profitability and strive to grasp the pace of capacity expansion to ensure a certain level of gross margin.