Core Viewpoint - The company, SMIC, is a leading integrated circuit foundry in the world and a leader in China's semiconductor manufacturing industry, focusing on expanding its production capacity and maintaining its competitive edge in a rapidly evolving market [5][13]. Company Overview - SMIC is recognized for its advanced manufacturing capabilities and service offerings, providing 8-inch and 12-inch wafer foundry services globally [5]. - The company operates under a red-chip structure and has a comprehensive ecosystem that includes design services, IP support, and photomask manufacturing [4]. Business Model - The primary business model involves wafer foundry services based on various technology nodes and platforms, along with supporting services such as design and photomask manufacturing [6]. - The company has a robust R&D mechanism with a structured process to ensure successful project transitions from conception to production [7]. Industry Situation - The global semiconductor industry is showing signs of recovery in 2024, with varying growth across different segments, driven by demand for advanced applications in smart devices and automotive electronics [10][11]. - The foundry industry remains a core segment of the semiconductor value chain, characterized by high technical, talent, and capital intensity [12]. Financial Performance - For the reporting period, the company achieved revenue of RMB 57,795.6 million, a 27.7% increase year-on-year, while net profit attributable to shareholders was RMB 3,698.7 million, a decrease of 23.3% [17]. - The cash flow from operating activities was RMB 22,658.6 million, a slight decrease of 1.7% compared to the previous year [17]. Future Development Trends - The company plans to maintain significant capital expenditures in 2025, exceeding 30% of its latest audited net assets, to support capacity expansion and core business development [23]. - The company aims to enhance its competitive edge through continuous investment in technology and production capabilities, ensuring long-term value creation for shareholders [24].

Core Insights - Company reported a revenue of RMB 57.796 billion for 2024, a year-on-year increase of 27.7%, while net profit decreased by 23.3% to RMB 3.699 billion [1] - The semiconductor market is experiencing a recovery, driven by demand from smartphones, personal computers, and consumer electronics, with emerging markets like IoT and wearables expanding [2] - The company is focusing on innovation, cost reduction, and market expansion to meet the growing demand for local manufacturing and to adapt to customer needs [2] Financial Performance - Revenue growth was attributed to an increase in wafer sales volume, which rose by 36.7% from 5.867 million units in 2023 to 8.021 million units in 2024 [1] - Average selling price of wafers decreased from RMB 6,967 in 2023 to RMB 6,639 in 2024 [1] - Gross margin stood at 18% with a capacity utilization rate of 85.6% [1] Market Segmentation - In 2024, the revenue breakdown by application was as follows: smartphones (27.8%), personal computers (16.6%), consumer electronics (37.8%), IoT and wearables (10.0%), and industrial and automotive (7.8%) [3] - By region, the revenue distribution was: China (84.6%), USA (12.4%), and Eurasia (3.0%) [3] Industry Outlook - The global semiconductor industry is characterized by both cyclicality and growth potential, with short-term supply-demand imbalances not affecting long-term trends [2] - The company anticipates stable or moderate growth in various application areas in 2025, with AI continuing to grow rapidly [4] - The company aims for revenue growth above the average of comparable peers in 2025, with capital expenditures expected to remain stable compared to the previous year [4]