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3w ago

SMIC Reports 16% Revenue Gain While Profit Drops as Tariffs Fail to Trigger Hard Landing

Co-CEO Zhao Haijun attributes ongoing capacity tightness through October to contingency measures coupled with robust domestic demand

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A logo of Semiconductor Manufacturing International Corporation (SMIC) is seen at China International Semiconductor Expo (IC China 2020) following the coronavirus disease (COVID-19) outbreak in Shanghai, China October 14, 2020. REUTERS/Aly Song/File Photo

Overview

  • Revenue rose 16.2% year-on-year to $2.2 billion in Q2 while profit attributable to owners fell 19.5% to $132.5 million, missing analysts’ estimates.
  • Co-CEO Zhao Haijun said U.S. tariffs did not produce the feared hard landing on SMIC’s business.
  • The company is not consulting customers on President Trump’s 100% tariff plan and expects a muted effect due to contingency measures implemented after April’s tariff hikes.
  • SMIC forecasts production capacity will remain tight through October as robust domestic substitution demand persists.
  • China made up 84% of SMIC’s revenue in the quarter while U.S. sales accounted for 12.9% and Hong Kong-traded shares fell more than 5% on the day of the earnings release.