Guan Cha Zhe Wang·2025-05-09 07:04Core Viewpoint - SMIC reported a strong year-on-year increase in revenue and net profit for Q1 2025, but did not meet revenue guidance, with expectations of a sequential decline in Q2 revenue due to production fluctuations and pricing pressures in the market [1][2]. Financial Performance - The company achieved total revenue of 16.301 billion yuan, a year-on-year increase of 29.4%, and a net profit of 1.356 billion yuan, up 166.5% year-on-year [1]. - Despite a decline in average selling prices, the gross margin increased to 22.5%, exceeding the guidance of 19% to 21%, driven by a 27.7% year-on-year increase in wafer shipments [1]. Revenue Breakdown - Wafer revenue accounted for 95.2% of total revenue, with a year-on-year increase of 2.2% and a sequential increase of 2.7% [2]. - Revenue by application: - Smartphones: 24.2% (down 7% YoY) - Computers and tablets: 17.3% (down 0.2% YoY) - Consumer electronics: 40.6% (up 9.7% YoY) - IoT and wearables: 8.3% (down 4.9% YoY) - Industrial and automotive: 9.6% (up 2.4% YoY) [2]. Market Outlook - The company anticipates downward adjustments in customer inventory targets for smartphones and stable but lackluster growth in PC sales, with overall supply exceeding demand in the panel market [2]. - SMIC will support customers in facing market price competition but will not engage in proactive price cuts to gain market share [2]. Regional Performance - Revenue by region: - China: 84.3% (up 2.7 percentage points YoY, down 4.8 percentage points QoQ) - USA: 12.6% (down 2.3 percentage points YoY, up 3.7 percentage points QoQ) - Eurasia: 3.1% (down 0.4 percentage points YoY, up 1.1 percentage points QoQ) [3]. Impact of Tariffs - The company noted minimal direct impact from new tariffs, estimating the effect to be less than one percentage point, with continued strong capacity utilization and positive signals of recovery in various sectors [3].