With precise attack, SMIC's revenue in Q1 2021 stabilized at US$1.1 billion!

On May 13, SMIC announced its first quarter financial report for 2021. As of March 31, 2021, SMIC's sales in the first quarter were US$1.1036 billion, a year-on-year increase of 22% and a month-on-month increase of 12.5%.

SMIC's gross profit in the first quarter was US$250.1 million, up 7.1% year-on-year and 41.5% quarter-on-quarter. The gross profit margin was 22.7%, compared with 18.0% in the fourth quarter of 2020 and 25.8% in the first quarter of 2020.

Financial report details

The financial report shows that SMIC's capacity utilization rate reached 98.7% in the first quarter of 2021. Sales in China fell from the previous quarter to 55.6%. Sales in Europe and Asia rose from the previous quarter to 16.7%, and sales in North America were the same as the previous quarter. It is worth noting that SMIC's 40/45nm process accounted for 16.3% of revenue in the first quarter, up from 14.8% in the previous quarter, and 14/28nm revenue accounted for 6.9%, up from 5% in the previous quarter.                                             

In the first quarter of 2021, the revenue share by application was: smartphones 35.2%, smart home 13.9%, consumer electronics 20.4%, and others 30.5%. In terms of service type, wafer foundry still accounts for an extremely high proportion of 91.2%, while the proportion of mask manufacturing, wafer testing and others has dropped from 11% in the previous quarter to 8.8%.

Looking at the revenue contribution of each region, revenue from China still accounts for more than half, reaching 55.6%; Eurasia accounts for 16.7%, and the United States accounts for the same as the previous quarter.

By process classification, the revenue contribution of 28nm and 14nm processes increased to 6.9%, and the revenue contributions of other processes were 150/180nm (30.3%), 55/65nm (32.8%), 40/45nm (16.3%), 110/130nm (6%), 250/350nm (3.6%), and 90nm (4.1%).

The financial report shows that SMIC's monthly wafer production capacity in the first quarter of 2021 increased from 520,750 8-inch equivalent wafers in the fourth quarter of 2020 to 540,750 8-inch equivalent wafers in the first quarter of 2021, mainly due to the expansion of 200mm wafer fab capacity this quarter.

Accurately overcome difficulties and stabilize revenue at US$1.1 billion

Dr. Gao Yonggang, Chief Financial Officer of SMIC, commented: "In the first quarter, the company's revenue and gross margin were higher than the guidance. Revenue was US$1.104 billion, a month-on-month increase of 12.5%; gross margin was 22.7%, a month-on-month increase of 4.7 percentage points. Revenue in the second quarter is expected to grow by 17% to 19% month-on-month, and gross margin is expected to be between 25% and 27%. Revenue in the first half of this year is expected to be approximately US$2.4 billion.

The entire market is developing positively this year. Under normal circumstances, the company should have continued the high growth trend of last year. However, the company was included in the Entity List by the US government and was restricted in purchasing related US products and technologies. The company still faces uncertain risks in the second half of this year. In February of this year, the company gave a full-year forecast of mid- to high-single-digit revenue growth and a gross profit margin of mid-10% to 20%. Based on the information currently available to the company, based on the uncertainty factor that operational continuity is not significantly adversely affected, the company's full-year revenue and gross profit margin are expected to exceed the February expectations. For the sake of prudence, the company will not make specific range revisions to the performance expectations for the second half of the year and the full year. Please understand. The company will do its utmost to ensure operational continuity and performance improvement, and better return to shareholders. "

Dr. Haijun Zhao and Dr. Mengsong Liang, Co-CEOs of SMIC, commented: "The company's performance in the first half of the year is expected to exceed original expectations, and the revenue in the first quarter has stabilized at US$1 billion. In the face of difficulties, the company has made precise efforts to overcome them and is getting better and better. The production capacity of mature processes will continue to be fully loaded by the end of this year, and the new capacity will mainly be formed in the second half of the year; the revenue of advanced processes in the first quarter has grown quarter-on-quarter after the trough, and NTO has been steadily introduced.

Regarding the outlook for the second quarter of 2021, SMIC expects that revenue in the second quarter of 2021 will increase by 17% to 19% quarter-on-quarter, and gross profit margin will be between 25% and 27%.

SMIC said that the planned capital expenditure in 2021 is about US$4.3 billion, most of which will be used for the expansion of mature processes, a small part for advanced processes, civil engineering of the new joint venture project in Beijing and other