Geopolitical factors and supply chain issues impact Semiconductor Manufacturing International Corp.
- China’s biggest chip maker, Semiconductor Manufacturing International Corp., reports a near 80% profit drop
- Exec warns of ‘gray rhino effect’ caused by geopolitical factors and supply chain issues
- Third-quarter net profit falls 76.7% to $93.9 million, missing expectations
- Revenue totals $1.621 billion, up 3.9% sequentially but down 15% YoY
- Gross margins slip to 19.8% in Q3
- Fourth-quarter revenue expected to grow by 1% to 3%, but gross margins will be dragged down
- SMIC plans to raise capital expenditures to around $7.5 billion
- China accounted for 84% of SMIC’s revenue in Q3
China’s biggest chip maker, Semiconductor Manufacturing International Corp. (SMIC), reported a near 80% drop in profit for the third quarter. The company’s co-chief executive, Zhao Haijun, warned of a ‘gray rhino effect’ caused by geopolitical factors and supply chain issues. SMIC’s net profit fell 76.7% to $93.9 million, missing expectations. Revenue totaled $1.621 billion, up 3.9% sequentially but down 15% year-over-year. Gross margins slipped to 19.8% in the third quarter. Looking ahead, SMIC expects fourth-quarter revenue to grow by 1% to 3%, but gross margins will be dragged down. The company plans to raise capital expenditures to around $7.5 billion. China accounted for 84% of SMIC’s revenue in the third quarter.
Factuality Level: 7
Factuality Justification: The article provides information about Semiconductor Manufacturing International Corp’s financial results and the factors that have affected its performance. It includes quotes from the company’s co-chief executive and an analyst. The information provided is specific and factual, without any obvious bias or misleading information. However, there are some tangential details and opinions included in the article.
Noise Level: 3
Noise Justification: The article contains relevant information about Semiconductor Manufacturing International Corp’s financial performance and the factors affecting it. However, it lacks depth and analysis, and there are some repetitive statements. The article also includes some speculative statements without providing evidence or data to support them.
Financial Relevance: Yes
Financial Markets Impacted: The article discusses the financial performance of Semiconductor Manufacturing International Corp (SMIC), China’s biggest chip maker. It mentions that SMIC’s shares slid 6% in Hong Kong following weak sales and plunging profits. The article also mentions that SMIC has been grappling with weak demand and supply-chain issues, as well as being under U.S. sanctions since 2020.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article does not describe any extreme event.
Public Companies: Semiconductor Manufacturing International Corp (688981)
Private Companies: Huawei
Key People: Zhao Haijun (Co-Chief Executive at Semiconductor Manufacturing International Corp), Jenny Hardy (Portfolio Manager at GP Bullhound)
Reported publicly:
www.marketwatch.com 
