SMIC Q1 profit jumps 161.9% to $188m

Semiconductor Manufacturing International Corp (SMIC), China’s largest contract chip maker, reported a 161.9% increase in first-quarter profit compared to the previous year.

Profit for the March quarter totaled US$188 million. It fell short of analysts’ expectations of US$222.4 million, according to LSEG data.

Revenue rose 28.4% year-on-year to US$2.2 billion but also missed market forecasts of US$2.3 billion.

SMIC is listed on the Hong Kong Stock Exchange under the code 0981.HK and is a key player in China’s semiconductor industry.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ SMIC’s growth outpaces industry average amid semiconductor boom

SMIC’s 28.4% revenue increase significantly outperforms the broader semiconductor industry, which saw global sales rise by 18.8% in Q1 2025 compared to Q1 2024 1.

This outperformance comes during a remarkable industry-wide expansion, with global semiconductor sales reaching $167.7 billion in Q1 2025 and marking the 11th consecutive month of year-over-year growth 1.

The strong performance reflects SMIC’s strategic positioning in a market projected to reach $697 billion in 2025, driven largely by AI applications and data center expansions 2.

However, SMIC’s profit miss relative to analyst expectations ($188 million vs $222.4 million) suggests some operational challenges despite the revenue growth 3.

Looking at the details, SMIC’s revenue growth was driven primarily by increased wafer shipments at lower prices rather than premium product mix improvements, pointing to potential margin challenges 4.

2️⃣ Contrasting short-term gains with cautious future outlook

Despite SMIC’s impressive 161.9% profit surge in Q1, the company has provided guidance indicating a 4-6% revenue decline for Q2 2025, signaling near-term headwinds 5.

The company managed a gross margin of 22.5% that exceeded expectations, demonstrating effective cost management even as pricing pressures increased 4.

This pattern reflects broader industry dynamics where analysts project strong but segmented growth. The semiconductor market is expected to grow 9.5% overall in 2025, but with significant variation across segments 6.