2 1 Shi Ji Jing Ji Bao Dao·2025-11-15 14:41Core Viewpoint - SMIC (Semiconductor Manufacturing International Corporation) has reported strong financial results for Q3, driven by the domestic supply chain shift and AI computing power expansion, but has provided cautious guidance for Q4 and next year, indicating potential challenges ahead [1][2][9]. Group 1: Financial Performance - In Q3, SMIC achieved revenue of $2.382 billion, a year-on-year increase of 9.7% and a quarter-on-quarter increase of 7.8% [1]. - The net profit for Q3 was approximately $192 million, reflecting a year-on-year growth of 28.9% [1]. - The monthly capacity for 8-inch standard logic wafers surpassed one million for the first time, with a capacity utilization rate reaching 95.8% [1][7]. Group 2: Domestic Supply Chain Shift - The growth in Q3 was primarily attributed to the shift of customers to the domestic supply chain, with revenue from Chinese customers accounting for 86.2% of total revenue, up from 84.1% in Q2 [4]. - Revenue from Chinese customers increased by 11% quarter-on-quarter, particularly driven by domestic consumer electronics clients replacing overseas suppliers [4]. Group 3: Inventory Replenishment - Customers are replenishing inventory due to previous understocking caused by tariff concerns, particularly in the analog, power, and high-current product categories [5]. - The automotive and industrial sectors are also reversing their previous low inventory levels, leading to increased demand for replenishment [6]. Group 4: Operational Metrics - The overall capacity utilization rate reached 95.8%, a 3.3 percentage point increase from the previous quarter, marking the highest level since Q2 2022 [7]. - The gross margin for Q3 was 22.0%, up 1.6 percentage points quarter-on-quarter, supported by high capacity utilization offsetting depreciation pressures [7][11]. Group 5: Cautious Outlook - Despite strong Q3 performance, SMIC's guidance for Q4 is conservative, expecting revenue to be flat or grow by 2% quarter-on-quarter, with gross margin projected to decline to 18%-20% [9][10]. - The anticipated "super cycle" in memory chips, driven by AI demand, poses risks for SMIC, as it may lead to supply chain mismatches and cost pressures [10][11]. Group 6: Competitive Landscape - The rising prices of memory chips could squeeze profit margins for terminal products, leading to pressure on SMIC's customers to reduce prices for other chips, which may impact SMIC's profitability [10][11]. - The company acknowledges that competition within the industry will remain intense, despite the high demand for its services [12].