SMIC shares rise nearly 5% after third-quarter earnings beat estimates

Shares of Semiconductor Manufacturing International Corp (SMIC) surged nearly 5% following the release of its third-quarter earnings, surpassing market expectations. The Chinese chipmaker reported a significant increase in net profit attributable, rising 123.4% year-on-year to $428.4 million, which exceeded the LSEG analyst consensus of $418.4 million.

Additionally, revenue grew by 33.9% to $3.19 billion, surpassing the estimated $3.09 billion. Gross profit expanded by 82.3% to $953.2 million, and the gross margin improved to 29.9%, up from 22% the previous year and 25.3% in the prior quarter. This positive performance was driven by higher wafer shipments, which increased by 5.7% sequentially to 3.03 million eight-inch equivalent wafers, and improved factory utilization, which rose to 97.3% from 93.7% in the second quarter.

SMIC's revenue in China accounted for 90.8% of total earnings, highlighting the company's heavy reliance on its domestic market. The company anticipates a 4% to 6% sequential revenue increase for the fourth quarter, with a gross margin forecast between 26% and 28%, slightly below the 29.9% achieved in the third quarter.

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