2021-03-31 16:00Financial Performance - In 2020, the total revenue reached RMB 27.47 billion, a year-on-year growth of 24.8%[9] - Gross profit for the year was RMB 6.53 billion, reflecting a year-on-year increase of 42.4%[9] - The net profit attributable to the company was RMB 4.33 billion, representing a year-on-year growth of 141.5%[9] - EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was RMB 14.12 billion, up 46.4% year-on-year[9] - The company reported a revenue of approximately $3.3 billion for the year 2020, representing a year-over-year increase of 25% compared to 2019[15] - The gross profit margin for 2020 was 22.5%, an increase from 20.1% in 2019, indicating improved operational efficiency[15] - The company reported a net income of $500 million for 2020, compared to a net loss of $200 million in 2019, demonstrating a strong turnaround[15] - The company's operating revenue for 2020 was CNY 27,470,709 thousand, representing a 24.8% increase compared to CNY 22,017,883 thousand in 2019[22] - Net profit attributable to shareholders reached CNY 4,332,270 thousand, a significant increase of 141.5% from CNY 1,793,764 thousand in the previous year[22] - The net cash flow from operating activities was CNY 13,174,290 thousand, up 61.8% from CNY 8,139,992 thousand in 2019[22] - The gross profit margin improved to 23.8%, an increase of 3.0 percentage points from 20.8% in 2019[23] - The net profit margin increased to 14.6%, up 8.8 percentage points from 5.8% in 2019[23] - Basic earnings per share rose to CNY 0.67, a 97.1% increase compared to CNY 0.34 in 2019[23] - The company reported a total of CNY 2,635,368 thousand in non-recurring gains and losses for 2020, compared to CNY 2,315,859 thousand in 2019[27] - The company's net profit for 2020 reached CNY 4,021,326 thousand, a significant increase from CNY 1,268,528 thousand in 2019, representing a growth of approximately 216%[29] - The company's EBITDA for 2020 was CNY 14,124,599 thousand, up from CNY 9,648,017 thousand in 2019, indicating a growth of about 46%[29] Production and Capacity Expansion - The company achieved a target of 15,000 wafers for FinFET installation capacity, with the first generation of mass production steadily advancing[9] - The company plans to continue expanding production capacity to meet increasing customer demand amid tight global foundry capacity[9] - The company plans to expand its production capacity by 30% in the next two years to meet increasing demand for semiconductor products[15] - The company maintained a high capacity utilization rate in 2020, expanding its production capacity to meet diverse customer needs across various technology nodes[30] - The company has a total of 27,661.2 million in construction in progress, which represents 13.5% of total assets, indicating ongoing capacity expansion[72] Research and Development - Research and development expenses for 2020 were approximately $1.1 billion, accounting for 33% of total revenue, reflecting the company's commitment to innovation[15] - The company has established a comprehensive and efficient innovation mechanism, ensuring successful transformation of R&D projects through a structured process[32] - The company has successfully developed a new 5nm process technology, which is expected to be commercially available in 2021[15] - R&D investment totaled approximately 4.67 billion RMB, accounting for 17.0% of operating revenue, a decrease of 4.5 percentage points from the previous year[44] - The company filed 991 new patent applications and obtained 1,284 patents during the reporting period, bringing total patents to 17,973[43] - The company is focused on enhancing device performance and integration levels to meet the growing demands of emerging applications[41] Market and Industry Trends - In 2020, the global semiconductor sales reached USD 440.4 billion, with a year-on-year growth of 6.8%, and is expected to reach USD 488.3 billion in 2021, growing by 10.9%[37] - China's integrated circuit industry sales in 2020 amounted to CNY 884.8 billion, reflecting a year-on-year increase of 17%[37] - The design sector within China's integrated circuit industry saw sales of CNY 377.8 billion, growing by 23.3% in 2020[37] - The increasing demand for integrated circuits in emerging fields such as AI, robotics, and IoT presents new opportunities for the company[37] - SMIC ranks fourth globally in the pure wafer foundry market and first among mainland Chinese companies according to IC Insights' 2020 report[40] Corporate Social Responsibility - The company has committed to corporate social responsibility, donating RMB 10 million to frontline pandemic efforts and raising RMB 28.93 million for the "Heart and Liver Baby Plan" charity project[10] - The company aims to maintain compliance while actively communicating with suppliers and government departments to ensure operational continuity[9] - The company is focused on exploring sustainable development paths in response to external uncertainties and market changes[9] Risks and Challenges - The company faced challenges due to the U.S. "Entity List" restrictions, affecting customer and capacity structure adjustments[9] - The company is subject to U.S. export control policies, which may limit its ability to obtain necessary production materials and investment from U.S. entities, posing a risk to operations[70] - The company faces risks related to technology talent shortages due to increased competition for skilled personnel in the integrated circuit industry[60] - The company is exposed to risks from potential changes in tax incentives, as several subsidiaries benefit from reduced corporate tax rates due to their high-tech status[76] - The company faces ongoing litigation risks, including a patent lawsuit and arbitration claims totaling approximately USD 20.72 million[81] Shareholder and Equity Management - The company has established various share incentive plans that were still in effect as of December 31, 2020[127] - The company has committed to ensuring that its stock distribution complies with the listing conditions of the Hong Kong Stock Exchange and Shanghai Stock Exchange[146] - The company has a long-term commitment to dividend distribution, ensuring shareholder returns[141] - The company has not declared or paid any cash dividends on ordinary shares during the reporting period[123] - The company has committed to investing in the semiconductor sector, with a significant capital injection into the joint venture with SMIC Southern Integrated Circuit Manufacturing Co., amounting to USD 1.5 billion and USD 750 million from various funds[110] Legal and Compliance Matters - The company is currently involved in a significant lawsuit related to securities, filed in the U.S. District Court, alleging violations of the Securities Exchange Act of 1934, seeking unspecified economic compensation[168] - The company is also engaged in a patent lawsuit initiated by Innovative Foundry Technologies LLC, with ongoing proceedings in both federal court and the U.S. Patent and Trademark Office[170] - The arbitration notice from the Hong Kong International Arbitration Centre indicates that PDF Solutions, Inc. claims approximately $20.72 million from the company's subsidiary for disputes related to the 14nm Project Agreement[171]