“China’s leading foundry SMIC reported a 60.7% year-on-year jump in fourth-quarter attributable profit to $172.85 million, surpassing analyst expectations, while revenue climbed 12.8% to $2.49 billion on higher wafer shipments, improved capacity utilization, and a favorable product mix. The results highlight resilience in the semiconductor sector despite geopolitical pressures, with full-year 2025 performance showing solid growth and optimism for continued outperformance in 2026.”
SMIC’s Q4 Earnings Reflect Robust Operational Momentum
Semiconductor Manufacturing International Corporation (SMIC), China’s premier pure-play foundry, posted impressive fourth-quarter results for the period ended December 2025, underscoring the company’s ability to capitalize on recovering demand in key end markets. Attributable profit to owners reached $172.85 million, marking a substantial 60.7% increase from the same quarter a year earlier. This figure comfortably exceeded consensus estimates of around $170.3 million, demonstrating better-than-expected profitability amid a challenging global environment.
Revenue for the quarter came in at $2.49 billion, reflecting a solid 12.8% year-on-year rise and a 4.5% sequential increase from the third quarter. The top-line beat analyst projections of approximately $2.42 billion, driven primarily by elevated wafer shipments, near-full capacity utilization, and an optimized mix favoring higher-value nodes.
Capacity utilization stood at a strong 95.7% in the December quarter, reflecting sustained customer orders and efficient fab operations. Gross margin for Q4 settled at 19.2%, supported by disciplined cost management and pricing dynamics in mature and specialty process technologies where SMIC maintains competitive positioning.
The profit growth outpaced revenue expansion due to operational leverage, reduced non-operating drags, and efficiencies gained from scale. Non-GAAP metrics further highlighted core business strength, with some adjusted profit measures showing even sharper year-on-year gains in underlying performance.
Full-Year 2025 Performance Demonstrates Sustained Progress
For the full calendar year 2025, SMIC delivered unaudited revenue of approximately $9.33 billion, up about 16.2% from the prior year. Profit attributable to shareholders climbed 39.1% to $685.1 million, while gross margin expanded to 21.0%. These improvements stemmed from higher overall wafer volumes—total shipments reached around 9.7 million 8-inch equivalents—and an annualized capacity utilization rate of 93.5%.
The company significantly expanded its production footprint during the year, boosting monthly capacity to 1.059 million 8-inch equivalent wafers. Capital expenditures totaled $8.1 billion in 2025, a 10.5% increase from the previous period, focused on advancing mature nodes, specialty technologies, and incremental capabilities in more advanced areas to meet domestic and international demand.
This investment strategy has positioned SMIC to benefit from ongoing trends in supply-chain localization, particularly within China, where reshoring efforts and self-reliance initiatives continue to drive incremental orders to homegrown foundries.
Outlook Points to Steady Momentum into 2026
Management expressed confidence in the trajectory ahead, guiding for first-quarter 2026 revenue to remain broadly flat sequentially, with gross margin expected in the 18%-20% range. For the full year 2026, the company anticipates revenue growth to exceed industry averages in its primary markets, supported by persistent demand in consumer electronics, automotive, IoT, and industrial applications.
Capital spending plans for 2026 are set to remain largely unchanged from the $8.1 billion level in 2025, indicating a disciplined approach to balancing expansion with financial prudence. This steady capex stance allows SMIC to maintain momentum in capacity ramp-ups while preserving balance-sheet flexibility in an uncertain geopolitical landscape.
Key Financial Highlights
Q4 2025 Revenue : $2.49 billion (+12.8% YoY, +4.5% QoQ)
Q4 2025 Attributable Profit : $172.85 million (+60.7% YoY)
Q4 Gross Margin : 19.2%
Q4 Capacity Utilization : 95.7%
Full-Year 2025 Revenue : ~$9.33 billion (+16.2% YoY)
Full-Year 2025 Attributable Profit : $685.1 million (+39.1% YoY)
Full-Year Gross Margin : 21.0%
2025 Capex : $8.1 billion
These results arrive against a backdrop of continued U.S. export restrictions on advanced semiconductor equipment, which limit SMIC’s access to cutting-edge tools. However, the company’s focus on legacy and mid-range nodes—critical for a wide array of applications—has insulated it from the most severe impacts, allowing it to capture share in stable, high-volume segments.
Investors will watch closely as SMIC navigates evolving trade dynamics, domestic policy support, and global chip cycle trends. The latest earnings affirm the foundry’s strategic progress and its role as a vital player in the evolving semiconductor supply chain.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial recommendation, or solicitation to buy or sell securities. Market conditions can change rapidly.