China’s Largest Chip Maker Faces Challenges Despite Growing Revenue
- SMIC expected to report Q2 results on Thursday
- Net profit likely to fall 81% YoY to $77.8 million
- Revenue estimated at $1.85 billion, up 19% YoY
- Shares down 20% this year after a 13% rise in Q2
- Chinese chip stocks rose after $48B fund announcement for local supply chain
- Gross margin pressure due to heavy capex and growth in China’s foundries
- Potential order decline risk from customer advance orders in H1
Semiconductor Manufacturing International Corp. (SMIC) is set to release its second-quarter results on Thursday, with analysts predicting a 81% drop in net profit compared to the same period last year. This follows a 69% decline in Q1 amid heavy cost of sales. Revenue is estimated at $1.85 billion, up 19% from last year and in line with the company’s guidance for 5-7% sequential growth from Q1’s $1.75 billion. Despite a rise in shares after China’s $48B fund announcement for its semiconductor industry, SMIC faces potential gross margin pressure due to heavy capital expenditure and growing competition from local foundries. Some analysts worry about a possible second-half order decline due to customer advance orders in H1.
Factuality Level: 8
Factuality Justification: The article provides relevant information about SMIC’s expected financial results and includes estimates from analysts, as well as potential challenges the company may face in the future. It also mentions the context of China’s semiconductor industry fund and concerns about advance orders. The information is presented without sensationalism or personal opinion.
Noise Level: 3
Noise Justification: The article provides relevant information about SMIC’s expected financial results and potential challenges it may face in the future. However, it lacks analysis or exploration of long-term trends or possibilities, accountability, scientific rigor, intellectual honesty, staying on topic, evidence, data, examples, and actionable insights.
Public Companies: Semiconductor Manufacturing International Corp. (SMIC)
Key People: Sherry Qin (Author), Jefferies analysts (Analysts)
Financial Relevance: Yes
Financial Markets Impacted: Semiconductor industry and Chinese chip stocks
Financial Rating Justification: The article discusses SMIC’s financial performance and its impact on the semiconductor industry, as well as the potential effects on Chinese chip stocks.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no mention of an extreme event in the article, which discusses financial performance and expectations for Semiconductor Manufacturing International Corp.
Move Size: No market move size mentioned.
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