Jin Rong Jie·2025-08-08 12:08Core Viewpoint - Semiconductor Manufacturing International Corporation (SMIC) reported a mixed performance for Q2 2025, with revenue growth but significant declines in net profit, raising concerns about operational efficiency [1][2][5]. Revenue Analysis - Q2 2025 revenue reached $2.209 billion, a year-on-year increase of 16.2% but a quarter-on-quarter decrease of 1.7% [8]. - The revenue breakdown by application shows smartphones at 25.2%, computers and tablets at 15%, consumer electronics at 41%, IoT and wearables at 8.2%, and industrial and automotive at 10.6% [5][6]. Profitability Metrics - Net profit for Q2 2025 was $132 million, down 19.5% year-on-year and down 29.5% quarter-on-quarter [1][8]. - Gross margin decreased to 20.4%, a decline of 2.1 percentage points from the previous quarter, attributed to a higher proportion of lower-margin consumer electronics orders [6][8]. Capacity and Utilization - Capacity utilization reached 92.5%, an increase of 2.9% from the previous quarter, with a total monthly capacity of 991,300 8-inch equivalent wafers [2][9]. - The company shipped 2.3902 million wafers in Q2 2025, reflecting a quarter-on-quarter increase of 4.3% and a year-on-year increase of 13.2% [9]. Operating Expenses - Operating expenses surged by 52.4% quarter-on-quarter to $299.1 million, driven by increased R&D and administrative costs [7][8]. - R&D expenses rose by 22.2% to $181.9 million, while administrative expenses increased by 26.5% due to new production line costs [7]. Market Position and Challenges - SMIC's market share in China remains strong, with 84.1% of revenue coming from the Chinese market, while the U.S. and Eurasia contributed 12.9% and 3%, respectively [6][9]. - The company faces challenges such as prolonged global inventory digestion, geopolitical supply chain fragmentation, and intensified price competition in mature process technologies [10].