2021-04-27 09:28Financial Performance - In 2020, Semiconductor Manufacturing International Corporation achieved a total revenue of $3.907 billion, representing a year-on-year growth of 25.4%[12] - The gross profit for the year was $921 million, which is a 43.3% increase compared to the previous year[12] - The net profit attributable to the company was $716 million, showing a remarkable year-on-year growth of 204.9%[12] - EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) reached $2.123 billion, reflecting a 54.6% increase year-on-year[12] - The company's revenue for 2020 was $3,906,975, representing a 25.4% increase from $3,115,672 in 2019[27] - Net profit attributable to shareholders for 2020 was $715,550, a significant increase of 204.9% compared to $234,681 in 2019[27] - The operating cash flow for 2020 reached $1,660,410, up 62.9% from $1,019,057 in 2019[27] - The gross profit margin improved to 23.6% in 2020, an increase of 3.0 percentage points from 20.6% in 2019[29] - The net profit margin for 2020 was 17.1%, up 12.0 percentage points from 5.1% in 2019[29] - Basic earnings per share for 2020 were $0.11, a 175.0% increase from $0.04 in 2019[29] Market and Industry Trends - The semiconductor industry is experiencing increased demand driven by new applications in AI and IoT, despite ongoing uncertainties from external factors[12] - The global semiconductor sales reached $440.4 billion in 2020, with a year-on-year growth of 6.8%, and is projected to reach $488.3 billion in 2021, with an expected growth of 10.9%[49] - In China, the integrated circuit industry sales amounted to RMB 884.8 billion in 2020, representing a year-on-year growth of 17%[49] - The design sector in China saw sales of RMB 377.8 billion in 2020, growing by 23.3% year-on-year, while the manufacturing sector's sales reached RMB 256 billion, up by 19.1%[49] Research and Development - The company has achieved industry-leading levels in mature processes, particularly in power management and ultra-low power technologies[12] - R&D investment totaled $677.4 million in 2020, accounting for 17.3% of revenue, a decrease of 4.8 percentage points from 2019[55] - The company has successfully developed multiple technology platforms, including 40nm and 0.11 micron embedded non-volatile memory, which have entered risk production[53] - The company filed for 952 new invention patents in 2020, bringing the total to 1,996[54] - The company has accumulated a total of 12,141 patents, including 10,051 invention patents, and has established a comprehensive intellectual property system[64] Operational Challenges - The company is facing challenges due to the U.S. Entity List restrictions, which have led to extended equipment procurement lead times[12] - The company faces risks related to export restrictions imposed by the US government, which may impact production and operations[67] - The ongoing US-China trade tensions have led to restrictions on the company's ability to obtain investments and necessary production materials from US entities[77] - The company faces risks related to supply chain disruptions, particularly for critical materials and equipment sourced primarily from overseas suppliers[75] Corporate Social Responsibility - The company donated cash and materials worth 10 million yuan to support frontline workers during the pandemic[13] - The "Heart and Liver Baby Project" has raised a total of 28.93 million yuan over eight years, helping over 500 impoverished children[13] - The company aims to continue fulfilling its corporate social responsibility and advancing corporate culture[13] Future Outlook and Strategy - In 2021, the company aims to expand capacity to meet increasing customer demand amid tight global wafer foundry capacity[12] - The company plans to maintain strong relationships with shareholders, customers, and suppliers to ensure robust returns[14] - The company plans to expand its market presence and invest in new technologies to drive future growth[33] - The company aims to enhance operational continuity and capacity expansion to meet customer demand amid supply chain uncertainties[124] Financial Reporting and Compliance - The financial data in the report is prepared in accordance with International Financial Reporting Standards[19] - The company is committed to maintaining consistency in financial reporting across different accounting standards, enhancing transparency for investors[32] - The company has established measures to minimize related party transactions that could adversely affect the issuer and other shareholders[147] Shareholder Relations and Governance - The company has confirmed that over 25% of its issued share capital is held by the public as of the reporting date[133] - The company has a stock incentive plan in place to motivate employees and align their interests with those of shareholders[133] - The independent non-executive directors agree that the decision not to distribute profits aligns with the company's long-term development needs and shareholder interests[141] Legal Matters - The company is involved in a patent lawsuit with Innovative Foundry Technologies LLC, with ongoing proceedings in the U.S. federal courts[169] - The company is facing arbitration with PDF Solutions, Inc. regarding a dispute over agreements related to the 14nm project, with claims amounting to approximately $20.72 million[170] - The company has faced a civil lawsuit in the U.S. regarding alleged violations of the Securities Exchange Act, with claims against the company and certain directors[168]