Chip maker SMIC experiences declining profits and margins amid sluggish demand
- SMIC shares fall after posting sharp profit drop and margin squeeze
- Third-quarter net profit fell 80% on the year to $94.0 million
- Revenue declined to $1.62 billion from $1.91 billion in the year-earlier period
- SMIC’s third-quarter gross margin fell to 19.8% from 38.9% last year
- SMIC expects fourth-quarter revenue to grow 1% to 3% on quarter
Semiconductor Manufacturing International Corp. (SMIC) saw its shares fall after reporting a sharp drop in profits and margins due to sluggish demand. The Chinese chip maker’s third-quarter net profit fell 80% to $94.0 million, missing expectations. Revenue also declined to $1.62 billion from $1.91 billion in the same period last year. SMIC’s gross margin for the quarter fell to 19.8% from 38.9% in the previous year. The company expects fourth-quarter revenue to grow by 1% to 3%, but its gross margin will be under pressure due to new capacity additions. SMIC’s shares fell as much as 6.6% in morning trade.
Factuality Level: 8
Factuality Justification: The article provides specific information about Semiconductor Manufacturing International Corp.’s declining profits and margins, as well as the reasons behind it. The information is based on the company’s own statements and financial data. However, there is no independent verification of the information provided, and the article does not include perspectives from other sources or experts in the industry. Therefore, while the information seems factual, it is important to consider it with caution.
Noise Level: 6
Noise Justification: The article provides information on Semiconductor Manufacturing International Corp.’s declining profits and margins, as well as the reasons behind it such as sluggish demand and supply-chain issues. It includes quotes from SMIC’s co-chief executive and an analyst’s research note. However, the article lacks in-depth analysis of long-term trends or antifragility and does not provide actionable insights or solutions.
Financial Relevance: Yes
Financial Markets Impacted: Shares of Semiconductor Manufacturing International Corp. (SMIC) fell in morning trade after the company posted declining profits and margins amid sluggish demand.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses the financial performance of SMIC, a chip maker, and its impact on the company’s shares. There is no mention of an extreme event.
Public Companies: Semiconductor Manufacturing International Corp. (SMIC)
Key People: Zhao Haijun (Co-Chief Executive), Liu Xiang (Kaiyuan Securities Analyst)
Reported publicly:
www.marketwatch.com 
