SMIC(00981)2024-09-09 08:33Financial Performance - Semiconductor Manufacturing International Corporation reported a revenue of 3,651,452 thousand, representing a 20.8% increase compared to 3,651.5 million, a year-on-year increase of 20.8%, with the foundry business revenue reaching 14.49 billion in financial liabilities as of June 30, 2024, compared to 30.97 billion as of June 30, 2024, an increase from 25,651 thousand for the six months ended June 30, 2024, a decrease of 36% from 236,361 thousand, a decrease of 62.7% from 504.8 million, attributed to changes in product mix and increased depreciation[60]. - Operating profit fell by 45.1% to 0.03 from 235.8 million, a decline of 67.8% compared to 300 million in the first half of 2024, focusing on next-generation chip technologies[5]. - Research and development (R&D) expenses for the first half of 2024 amounted to 30,000 per R&D employee[29]. - The R&D team consists of experienced professionals, ensuring high-quality output and reliability in product development[31]. - The company is advancing several key projects, including a 28nm ultra-low leakage platform, which has released PDK V1.0 and is in the process of customer product introduction[27]. Market Position and Strategy - SMIC ranked fourth globally among pure wafer foundry companies based on 2023 sales figures, and it is the leading integrated circuit manufacturer in mainland China[23]. - The company plans to expand its production capacity by 20% in 2025 to meet the growing market demand for advanced semiconductor technologies[5]. - The company is exploring potential mergers and acquisitions to strengthen its market presence and technological capabilities[5]. - The company focuses on technology leadership, platform diversity, and performance differentiation to attract customers, while also emphasizing the development of new packaging technologies and design services[24]. - The company is actively enhancing its industry chain integration capabilities, aiming to provide comprehensive integrated circuit solutions[34]. Sustainability and Environmental Practices - SMIC is committed to enhancing its sustainability practices, with plans to reduce carbon emissions by 30% by 2030[5]. - The company invested $98 million in environmental protection during the reporting period[104]. - The company has constructed 22 sets of acidic gas treatment facilities, 6 sets of alkaline gas treatment facilities, 5 sets of organic gas treatment facilities, and 3 sets of arsenic-containing gas treatment facilities, along with 1 ammonia wastewater treatment system currently under construction[105]. - The company received the "Zero Waste Star" certificate from the Beijing Economic and Technological Development Zone in the first half of 2024, highlighting its commitment to environmental responsibility[107]. - All emission indicators of the company have met standards, with no administrative penalties received for environmental issues during the reporting period[107]. Risks and Challenges - The company faces risks related to technology upgrades and R&D investment, which are critical in the fast-evolving semiconductor industry[38]. - There is a significant risk of talent shortages in the semiconductor industry, which could impact the company's R&D progress and competitive edge[39]. - The company is exposed to risks from high customer concentration, which could affect operational stability and profitability if major clients face difficulties[42]. - Supply chain risks, including shortages and price fluctuations of critical materials and components, could adversely impact the company's production and operations[43]. - Geopolitical tensions and export control policies from countries like the U.S. could create supply chain uncertainties and operational challenges for the company[49]. Corporate Governance and Compliance - The company has maintained compliance with the corporate governance code and has a structured governance framework in place[82]. - The company will actively implement measures to mitigate the dilution of immediate returns for investors[117]. - The company guarantees that the content of the prospectus for the A-share issuance does not contain any false statements, misleading representations, or significant omissions, and will bear legal responsibility for the authenticity, accuracy, and completeness of the information[120]. - The company will accept supervision from regulatory bodies and the public regarding its commitments made during the A-share issuance[125]. - The company has confirmed that all public commitments made during the A-share issuance are binding and will be strictly adhered to[125].