[News] SMIC Q1 Net Profit Up 5%, Misses Forecasts; Smartphone-Related Revenue Share Hits Lowest Since 2021
Amid China’s semiconductor push, SMIC has remained a key player, with its earnings closely watched by the industry. According to The Wall Street Journal, SMIC posted a 5% increase in first-quarter net profit, missing analysts’ expectations. The report notes that net profit totaled US$197.4 million, below the consensus estimate of US$223.6 million, as operating expenses rose sharply, up 30% year over year and 43% from the previous quarter.
Meanwhile, as noted by STAR Market Daily, SMIC’s gross margin reached 20.1% in the first quarter, up 0.9 percentage points from the previous quarter but down 2.4 percentage points from a year earlier.
On the revenue side, according to South China Morning Post, SMIC reported first-quarter revenue of US$2.51 billion, up 11.5% year over year. By comparison, the report notes that China’s second-largest foundry, Hua Hong, posted first-quarter revenue of US$660.9 million, up 22.2% from a year earlier.
Looking ahead, South China Morning Post adds that SMIC expects second-quarter revenue to range between US$2.86 billion and US$2.91 billion.
As for capital expenditure, STAR Market Daily adds that SMIC’s CapEx totaled US$1.5628 billion in the first quarter of 2026, compared with US$2.4075 billion in the fourth quarter of 2025.
SMIC Navigates Weak Smartphone Demand
Turning to market conditions, as highlighted by The Wall Street Journal, SMIC, like others in the semiconductor industry, faces pressure from the memory supply crunch and geopolitical tensions, alongside weakening smartphone-related revenue.
STAR Market Daily notes that SMIC’s smartphone chip foundry revenue share fell to 18.9% in the first quarter from 24.2% a year earlier, marking its lowest level since at least 2021. The report adds that SMIC expects consumer memory chip supply conditions to improve from the third quarter, with demand for mid- to low-end smartphones potentially rebounding at that time.
Meanwhile, in terms of revenue by market, SMIC saw its China revenue share rise to 88.9%, while the shares from the U.S. and Eurasia declined, according to STAR Market Daily.
SMIC Maintains High Utilization Amid Expansion Push
As for capacity, SMIC’s monthly capacity, measured in 8-inch equivalent logic wafers, increased from 1.05875 million wafers in the fourth quarter of 2025 to 1.07825 million wafers in the first quarter of 2026, according to STAR Market Daily. The report also notes that SMIC maintained a high capacity utilization rate of 93.1% in Q1 2026.
The company is also expanding its presence within China’s semiconductor supply chain, with consolidation efforts continuing to advance. According to South China Morning Post, SMIC on Monday received regulatory approval for its acquisition of subsidiary Semiconductor Manufacturing North China (Beijing) Corp., in a deal described as the largest merger and acquisition in China’s chip foundry sector.
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(Photo credit: SMIC)
