Overview

• SMIC reported Q1 2025 revenue of $2.24 billion and net income of $188 million, both missing analyst expectations and its own forecasts.
• The company forecasts a 4–6% sequential revenue decline in Q2 due to production disruptions caused by equipment maintenance and tool validation issues.
• Despite operational challenges, SMIC achieved 89.6% capacity utilization in Q1, driven by strong domestic demand and government-backed localization efforts.
• U.S. export controls on advanced ASML tools continue to hinder SMIC's ability to scale advanced-node chip production, impacting yields and growth potential.
• SMIC plans to sustain $7 billion in capital expenditures for 2025, though Q1 R&D spending dropped to $148.9 million, reflecting resource shifts to address production issues.