Guan Cha Zhe Wang·2025-11-17 15:04Core Viewpoint - SMIC reported a strong demand for its production capacity, with a utilization rate of 95.8% in Q3 2025, indicating a supply-demand imbalance in the market. The company has adjusted its order fulfillment strategy due to a shortage of memory chips, particularly affecting its mobile business segment [1][4]. Financial Performance - For the first three quarters of 2025, SMIC's revenue reached approximately 49.51 billion RMB, a year-on-year increase of 18.2%. The net profit attributable to shareholders was about 3.82 billion RMB, up 41.1% year-on-year, with a gross margin of 23.2%, an increase of 5.6 percentage points [1][2]. - In Q3 2025, SMIC's revenue was 17.16 billion RMB, a quarter-on-quarter increase of 6.9%. The net profit for the quarter was 1.52 billion RMB, a year-on-year growth of 43.1%, with a gross margin of 25.5%, up 4.8 percentage points from the previous quarter [1][2][3]. Production Capacity and Market Conditions - SMIC's production capacity utilization increased from 92.5% in Q2 to 95.8% in Q3, with a monthly capacity of approximately 1.02 million wafers [2][3]. - The company has received a significant number of urgent orders for various products, including NOR/NAND Flash and MCUs, leading to a temporary reduction in mobile business share as non-urgent orders were postponed [1][4]. Market Outlook - Despite a traditionally slow Q4, SMIC's revenue guidance remains stable, projecting a quarter-on-quarter growth of 0% to 2%. The company anticipates maintaining a full production line and a gross margin of 18% to 20% [4]. - The ongoing shortage of memory chips has led to significant price increases, with DRAM prices rising by 171.8% year-on-year in Q3 2025. This situation has created a cautious ordering environment among clients, particularly in the networking industry [4][5]. Industry Dynamics - The current price surge in memory chips is attributed to the global demand for AI chips, with major manufacturers shifting their focus to higher-margin products, resulting in a tight supply of standard memory chips [5][6]. - SMIC believes that the supply chain's price increases will continue to impact downstream products, leading to price pressures for OEMs while maintaining a cautious outlook for future supply availability [5][6].