2 1 Shi Ji Jing Ji Bao Dao·2025-11-14 23:14Core Viewpoint - SMIC (Semiconductor Manufacturing International Corporation) has emerged as a market focus amid a new semiconductor cycle driven by domestic supply chain shifts and AI computing power expansion, reporting strong Q3 financial results but providing cautious guidance for Q4 and next year [1][2]. Group 1: Financial Performance - In Q3, SMIC reported revenue of $2.382 billion, a year-on-year increase of 9.7% and a quarter-on-quarter increase of 7.8%, with a net profit of approximately $192 million, up 28.9% year-on-year [1]. - The monthly capacity for 8-inch standard logic wafers exceeded one million for the first time, with a capacity utilization rate reaching 95.8%, close to full capacity [1][4]. - Despite strong performance, the company expects Q4 revenue to be flat to a 2% increase, with gross margin guidance lowered to 18%-20% [1][8]. Group 2: Drivers of Growth - The primary driver of growth in Q3 was the shift to domestic supply chains, with revenue from Chinese customers accounting for 86.2% of total revenue, up from 84.1% in Q2 [2]. - Customer inventory replenishment also contributed to Q3 performance, as many clients previously moved products overseas due to tariff concerns and are now restocking to compete in the domestic market [3]. Group 3: Operational Metrics - SMIC's overall capacity utilization rate reached 95.8%, a 3.3 percentage point increase from the previous quarter, marking the highest level since Q2 2022 [4]. - The increase in capacity utilization helped offset the pressure from new capacity depreciation, contributing to a gross margin of 22.0%, up 1.6 percentage points quarter-on-quarter [4][8]. Group 4: Market Dynamics and Challenges - The ongoing "super cycle" in memory chips, driven by AI demand, poses risks for SMIC, as rising memory prices could lead to supply chain mismatches and cost pressures for its clients [7][8]. - The company faces increased competition and cost pressures, with capital expenditures for Q3 at $2.394 billion, and total capital expenditures for the year expected to be similar to last year's $7.3 billion [8][9]. - SMIC's management emphasizes the need to focus on performance, quality, and customized product platforms to navigate the competitive landscape [9].