[News] SMIC’s U.S. Revenue Share Climbs to Nearly 13% in Q1; Warns of 4–6% Q2 Sales Dip

Amid looming chip tariffs, China’s leading foundry SMIC delivered a robust 161.9% year-on-year surge in Q1 profit, hitting $188 million, as highlighted by Reuters and China’s Wallstreetcn. Despite the strong start, the company struck a cautious tone for Q2, projecting a 4–6% Q2 sales dip and a slight drop in gross margin, from 22.5% in Q1 to 18%–20%, as stated in its press release.

SMIC, Hua Hong Signal Tepid Outlook Amid Market Uncertainty

According to the reports, SMIC’s management described the second half of the year as a mix of opportunities and challenges, emphasizing the importance of staying focused, strengthening resilience, and staying true to their core business.

As per Reuters, SMIC is keeping a close eye on how tariffs might affect demand, co-CEO Zhao Haijun said Friday, noting that visibility for the second half remains murky.

China’s second-largest foundry, Hua Hong, is taking a cautious stance on Q2 as well. According to the Economic Daily News, it expects revenue to range between $550 million and $570 million, a modest increase from Q1’s $540 million. However, gross margin is projected to dip to 7%–9%, down from 9.2% in Q1.

U.S. Market Gains Surprise Boost

Notably, as SMIC’s Q1 sales climbed 28.4% year-over-year to $2.2 billion, a regional shift in revenue sources emerged. The U.S. share rose to 12.6%, up from 8.9% in Q4 2024, according to data cited by Wallstreetcn.

In contrast, China’s contribution slipped to 84.3%, down from 89.1%, while EMEA held steady at 3.1%, according to Wallstreetcn.

In the first quarter, SMIC’s capacity utilization hit 89.6%, with total shipments reaching 2.29 million (8-inch equivalent) wafers. Meanwhile, SMIC’s Q1 revenue was driven primarily by consumer electronics at 40.6%, followed by smartphones at 24.2%, computers and tablets at 17.3%, IoT and wearables at 8.3%, and industrial/automotive applications rising to 9.6%, the report suggests.

Updates on Advanced Nodes

As per mydrivers, over 75% of SMIC capacity is dedicated to mature nodes (45nm and above). Though advanced nodes (28nm and below) make up a small share, the foundry giant has reportedly developed 14nm FinFET and N+1 (7nm-class) processes, the report notes.

The report further indicates that SMIC currently operates seven fabs across 8-inch and 12-inch lines, with annual wafer shipments reaching 8.021 million units (8-inch equivalent), or roughly 670,000 per month. Notably, three additional 12-inch fabs are said to be under construction.

According to a previous Wccftech report, industry sources suggested that SMIC is on track to finalize its 5nm chip development by 2025. However, the report highlighted that the cost of SMIC’s 5nm wafers could be as much as 50% higher than those produced by TSMC, which is largely due to SMIC’s lack of access to cutting-edge EUV equipment.

Wccftech added that SMIC’s 5nm wafer yields are reported to be only one-third of TSMC’s on the same process technology.

Read more

• [News] Huawei’s Ascend 920 Reportedly Set for 2H25 : Concerns Grow Over SMIC’s Capability and HBM Access
• [News] Chinese Chipmakers Ramp Up R&D Spending in 2024 — SMIC Tops the List with RMB 5.45B

(Photo credit: SMIC)