SMIC(00981)2024-11-08 00:30Financial Performance and Key Metrics - Revenue for Q3 2024 was 170 million, with EBITDA at 149 million [2] - Total assets stood at 12.6 billion in cash and total liabilities of 1.236 billion, while cash used in investing and financing activities was 97 million, respectively [3] Business Line Performance - Wafer revenue accounted for 94% of total revenue, with other revenue making up 6% [6] - By application, smartphone, computer & tablet, consumer electronics, connectivity & IoT, and industrial & automotive accounted for 25%, 16%, 43%, 8%, and 8% of wafer revenue, respectively [6] - 12-inch wafer revenue increased to 78.5% of total wafer revenue, while 8-inch wafer revenue decreased to 21.5% due to some shipments being pulled into Q2 [6][7] Market Performance - Revenue by region: China (86%), America (11%), and Eurasia (3%) [5][6] - Overseas revenue decreased by 6 percentage points sequentially due to geopolitical considerations, while revenue from Chinese customers increased by 6 percentage points [6][7] Strategic Direction and Industry Competition - The company added 21,000 12-inch wafer monthly capacity in Q3, which was quickly put into production, improving product mix and increasing blended ASP [4][5] - The company is accelerating capacity deployment to support the automotive, industrial, and new energy markets [9] - The company is focusing on local-for-local strategies, particularly in China, to meet the growing demand for localization [6][7] Management Commentary on Operating Environment and Future Outlook - Q4 2024 revenue is expected to be flat to up 2% sequentially, with a gross margin between 18% and 20% [3][7] - Full-year 2024 revenue is expected to be around $8 billion, with a growth rate of approximately 27%, better than the industry average [9] - The company expects to release around 30,000 12-inch wafer monthly capacity in Q4, but verification of new capacity will take time [8][9] Other Important Information - The company's overall utilization rate increased to 90.4% in Q3, up 5.2 percentage points sequentially [5] - The company is focusing on product mix optimization to improve blended ASP and maintain stable revenue and gross margins in Q4 [8] Q&A Session Summary Question: Outlook for 2025 and opportunities in local substitution - The company expects growth in 2025, particularly in AI, with revenue growth in the range of 4% to 9% excluding AI and advanced processes [12][13] - Key growth areas include mobile, smartphone, computer & tablet, consumer electronics, connectivity & IoT, and industrial & automotive [13][14] Question: Capacity expansion and pricing pressure in mature nodes - New capacity announcements have decreased, and the company expects slower growth in 2025 compared to 2024 [16][17] - Pricing pressure is expected due to oversupply in the industry, particularly in power discrete devices [17][18] Question: Capital expenditure and capacity release plans for 2025 - The company has not announced new projects and is focusing on completing existing projects in Shanghai, Beijing, Tianjin, Lingang, and Shenzhen [20][21] - The company is leveraging existing capacity for power devices and does not expect significant new investments for this segment [21][22] Question: Demand for BCD process and industry outlook - The company has strong capabilities in BCD and expects continued growth due to increasing demand for power management in AI and IoT applications [36][37] - The shift to 48V systems in automotive and industrial applications is driving demand for higher-quality BCD processes [37][38] Question: Impact of AI on the semiconductor industry - AI is expected to drive significant growth in the semiconductor industry, benefiting both direct and indirect players [34][35] - The company is well-positioned to capture opportunities in AIoT and edge computing, which do not require advanced nodes [35][36]