Core Insights - SMIC reported a revenue of $2.382 billion for Q3 2025, reflecting a quarter-on-quarter growth of 7.8% [1] - The company achieved a capacity utilization rate of 95.8% in Q3, with a total shipment of 2.499 million 8-inch equivalent wafers, marking a 4.6% increase from the previous quarter [1] - The average selling price of wafers increased by 3.8% quarter-on-quarter due to a shift in product mix towards more complex processes [1] Revenue Breakdown - Revenue by region showed China accounting for 86%, the US for 11%, and Eurasia for 3%, with a notable 11% quarter-on-quarter growth in China [1][2] - Revenue by application indicated that consumer electronics represented 43%, followed by smartphones at 22%, and computers and tablets at 15%, with consumer electronics experiencing a 15% quarter-on-quarter growth [2] Financial Performance - The gross margin for Q3 was 22.0%, up 1.6 percentage points from the previous quarter, driven by increased production offsetting rising depreciation costs [2] - For the first three quarters of the year, the company reported a total revenue of $6.838 billion, a 17.4% increase year-on-year, with a gross margin of 21.6%, up 5.3 percentage points from the previous year [2] Future Outlook - Despite Q4 being a traditional off-season, the company anticipates stable demand due to ongoing industry chain transitions, projecting Q4 revenue to remain flat or grow by 2% [2] - The company expects full-year revenue to exceed $9 billion, marking a significant milestone in revenue scale [2] Product Development - The company is advancing its product platforms, with the ultra-low power 28nm logic process entering mass production and various technology iterations in image sensors and embedded storage [3] - The company is capitalizing on growth opportunities in the automotive chip market by offering a range of specialized processes [3] - Current production lines are still in a state of supply-demand imbalance, with shipment volumes unable to fully meet customer demand [3]

Core Viewpoint - The company anticipates a significant increase in annual sales revenue, projected to exceed $9 billion, driven by rising production capacity and demand despite seasonal trends [1]. Financial Performance - In Q3, the company achieved total sales revenue of $2.382 billion, a 7.8% increase from Q2 2025's $2.209 billion and a 9.7% increase from Q3 2024's $2.171 billion [1]. - The company’s wafer sales volume reached approximately 2.4995 million pieces, with monthly production capacity exceeding 1 million pieces for the first time, reaching about 1.0228 million pieces [1]. - Q3 capacity utilization rose to 95.8%, an increase of 3.3 percentage points from the previous quarter [1]. - The average selling price (ASP) increased by 3.8% in Q3, with gross margin exceeding expectations at 22% [1]. Market Segmentation - The sales proportion of 12-inch products increased from 76.1% in Q2 to 77% in Q3 [2]. - By region, sales distribution in Q3 was 86.2% from China, 10.8% from the U.S., and 3% from Eurasia, with a notable 11% increase in revenue from the Chinese market [3]. Product Development - The company’s ultra-low power 28nm logic process has entered mass production, and there are ongoing technological iterations in image sensor (CIS) and signal processing (ISP) processes [3]. - The embedded storage platform is expanding from consumer markets to automotive and industrial MCU sectors, while specialized storage solutions are being developed for higher density and lower power consumption [3]. Industry Trends - The revenue share from industrial and automotive applications increased from 10.6% in Q2 to 11.9% in Q3, while the share from smartphones decreased to 21.5% [3]. - The company is experiencing a supply-demand imbalance, with current production unable to fully meet customer needs [3]. Challenges and Adjustments - The decline in smartphone revenue share is attributed to adjustments in production order prioritization to address urgent orders for other products, with customer understanding [4]. - The tight supply of storage chips has led to cautious procurement behavior among smartphone clients, impacting their production planning for the upcoming year [4].