China-based pure-play foundry Semiconductor Manufacturing International (SMIC) expects to post a revenue decline of 10-12% sequentially in the fourth quarter of 2020, with gross margin ranging from 16% to 18%.
SMIC reported revenue surged 32.6% on year and 15.3% sequentially to a record high of US$1.08 billion in the third quarter of 2020, while gross margin came to 24.2% compared with 26.5% in the prior quarter and 20.8% a year earlier.
SMIC utilized 97.8% of production capacity in the third quarter, when the foundry shipped about 1.44 million 8-inch equivalent wafers.
SMIC saw sales generated by 14nm and 28nm process technologies climb as a proportion of its total wafer revenue to 14.6% in the third quarter, up from 9.1% in the second quarter, while the share for its 0.15/0.18-micron technology remained the largest among all process nodes.
"Demand for non-FinFET technology application platforms continues to be strong, with significant growth from applications such as power management, RF signal processor, fingerprint sensor, and image signal processor," said SMIC's management in a statement. "Our FinFET technology addresses a diverse range of applications, and the yield of our first-generation FinFET technology has achieved industry standards, while our second-generation FinFET technology is entering small-volume risk production."
China remains SMIC's largest market. The region as a proportion of company revenue reached 69.7% in the third quarter of 2020.
SMIC also disclosed net cash flow generated from operations reached US$719 million in the third quarter of 2020, up significantly from US$148 million in the prior quarter and US$318 million a year ago.
Profit attributable to SMIC arrived at US$256 million in the third quarter, a record high, compared with US$138 million in the second quarter and US$115 million in third-quarter 2019. Earnings per ADS came to US$0.18, up from US$0.13 in the prior quarter and US$0.11 a year earlier.
In addition, SMIC revised upward its revenue outlook for 2020 to a 24-26% surge, and a higher gross margin than last year.
"The macro-environment in 2020 has become increasingly complex," SMIC's management noted. "The company is operating as usual, and though the export restrictions will have an impact on us, in the near-term we believe it is manageable. We will continue to follow up on this matter and further evaluate the impact."
