2023-03-28 12:13Financial Performance - Semiconductor Manufacturing International Corporation (SMIC) reported its audited financial results for the year ended December 31, 2022[1]. - In 2022, the company achieved a sales revenue of $7.2 billion, representing a year-on-year growth of 34%[17]. - The company's revenue for 2022 was $7,273,284, an increase of 33.6% compared to $5,443,112 in 2021[30]. - Net profit attributable to shareholders for 2022 was $1,817,942, reflecting a 6.8% increase from $1,701,803 in 2021[30]. - The net profit for 2022 was $2,198.1 million, up from $1,775.2 million in 2021, marking a growth of 23.8%[38]. - The gross profit margin increased to 38%, with net profit attributable to shareholders exceeding $1.8 billion, both reaching historical highs[17]. - The gross profit margin improved to 38.0%, an increase of 7.2 percentage points from 30.8% in 2021[31]. - The company reported a basic earnings per share of $0.23 for 2022, compared to $0.22 in 2021[31]. - The company achieved a revenue of $7,273.3 million in 2022, representing a year-over-year increase of 33.6%[42]. - The wafer foundry business revenue was $6,735.6 million, reflecting a growth of 35.2% compared to the previous year[42]. Assets and Liabilities - Total assets at year-end amounted to $43.8 billion, a 21% increase from the previous year, with a debt-to-asset ratio of 34%[17]. - Total assets as of December 31, 2022, were $43,807,784, an increase of 21.3% from $36,110,941 in 2021[30]. - The total liabilities were $14,846.4 million, compared to $10,672.8 million in 2021, indicating an increase in leverage[39]. - Cash and cash equivalents stood at $6,932.6 million, down from $8,581.7 million in 2021[39]. - The group's total assets as of December 31, 2022, included $18,855.5 million in property, plant, and equipment, representing 43.0% of total assets, an increase of 32.2% from the previous year[104]. Research and Development - The company emphasizes its commitment to innovation and enhancing service capabilities to improve competitiveness in the semiconductor industry[5]. - Research and development expenses accounted for 10.1% of operating revenue, down from 11.7% in 2021[31]. - R&D expenses amounted to $733.1 million in 2022, representing a 14.8% increase compared to $638.8 million in 2021, while the ratio of R&D expenses to revenue decreased from 11.7% to 10.1%[54]. - The R&D team consists of 2,326 personnel, accounting for 10.8% of the total workforce, with an average salary of $66,000, up from $65,000 in 2021[57]. - The company has developed a rich product platform with capabilities in various technology nodes, including logic circuits, power/analog, and image sensors, catering to diverse markets such as smartphones and consumer electronics[59]. Market and Industry Context - The semiconductor industry in mainland China is recognized as one of the largest and fastest-growing integrated circuit markets globally[18]. - The global integrated circuit industry experienced a slowdown in growth in 2022 due to geopolitical conflicts, energy crises, and inflation, leading to increased inventory and reduced demand for smartphones and PCs[48]. - The demand for wafer foundry services is primarily concentrated in communication electronics, consumer electronics, and computing sectors, with emerging fields like smart IoT and green energy expanding opportunities[117]. Risks and Challenges - SMIC faces various risks in its operations, including market competition and supply chain challenges, which could impact future performance[10]. - The company is exposed to risks from high customer concentration, which could affect operational efficiency and profitability if major customers face issues[67]. - The company faces risks related to talent shortages in the integrated circuit industry, which could impact R&D progress and competitiveness[64]. - Geopolitical tensions and export control policies from the U.S. pose risks to the company's operations, particularly regarding access to critical production materials and technologies[75]. - The company may experience financial volatility due to macroeconomic fluctuations and changes in demand within the integrated circuit industry[70]. Corporate Governance - The company has adopted a corporate governance policy since January 25, 2005, and has made revisions to comply with the corporate governance code[128]. - The company maintains a high level of corporate governance to protect shareholder interests[128]. - The board consists of 9 members, including 1 Executive Chairman and 4 Independent Non-Executive Directors[169]. - The company has established a compliance system for insider information management, confirming all directors adhered to it for the year ending December 31, 2022[174]. - The company has a policy for the ethical conduct of employees and directors, which is monitored by the board[177]. Shareholder Communication - The company continues to emphasize the importance of open communication with shareholders and investors[135]. - The company will hold its 2023 Annual General Meeting on June 28, 2023, in Shanghai[135]. - The company engages with analysts and investors through various channels, including announcements and roadshows[135]. - The company maintains a commitment to transparency in its financial reporting and shareholder communications[135]. Future Outlook - For 2023, the company expects a low single-digit percentage decline in revenue year-over-year, with a gross margin around 20%[119]. - The company has a reserve of new product tape-outs that is relatively full, indicating potential for future growth despite current market challenges[119]. - The company is focusing on developing a platform-based ecosystem service model, providing comprehensive integrated circuit solutions to clients[118]. - The company plans to enhance its collaboration with upstream and downstream partners in the semiconductor industry to address current challenges and optimize its product offerings[42].