Core Viewpoint - The article discusses the financial performance and operational outlook of SMIC for Q1 2025, highlighting a revenue increase driven by customer demand and cautioning about future revenue expectations due to production challenges and market conditions [2][5][10]. Financial Performance - In Q1 2025, SMIC reported revenue of $2.247 billion, a year-on-year increase of 28.4% and a quarter-on-quarter increase of 1.8%, although it fell short of guidance [2][10]. - The gross margin was 22.5%, up 8.8 percentage points year-on-year and stable quarter-on-quarter, exceeding the upper limit of guidance [2][10]. - Net profit attributable to shareholders was $188 million, representing a year-on-year increase of 161% and a quarter-on-quarter increase of 74% [2][10]. Operational Metrics - The capacity utilization rate improved significantly to 89.6%, up 4.1 percentage points quarter-on-quarter, with 8-inch wafer shipments reaching 2.292 million units, a year-on-year increase of 27.7% and a quarter-on-quarter increase of 15% [3][10]. - The average selling price (ASP) for 8-inch wafers was $933, down 8.9% quarter-on-quarter due to production fluctuations [3][10]. Market Segmentation - Revenue from mobile devices was $544 million, down 0.4% year-on-year but up 1.8% quarter-on-quarter; PC and tablet revenue was $389 million, up 27% year-on-year but down 7.8% quarter-on-quarter [4][10]. - The company noted limited impact from tariffs and expressed caution regarding future demand in the mobile and PC markets, with potential downward revisions expected [4][10]. Guidance for Q2 2025 - For Q2 2025, SMIC expects revenue to decline by 4-6% quarter-on-quarter, with a midpoint estimate of approximately $2.13 billion, primarily due to unexpected maintenance affecting product quality and ASP [5][9][10]. - The gross margin is projected to be between 18-20%, reflecting a decrease of 3.5 percentage points quarter-on-quarter due to rising depreciation costs [5][9][10]. Strategic Outlook - The company aims to maintain a competitive edge by enhancing production efficiency and responding to customer needs, particularly in the automotive and industrial sectors [13][18]. - SMIC is focused on building strong customer relationships and expanding capacity while ensuring quality and competitive pricing to secure future growth [18][22].