Leading Chinese foundry Semiconductor Manufacturing International Corporation (SMIC) held its 2023 annual shareholder meeting on June 28th.
According to SMIC, in the first half of 2023, the overall IC industry in China remained at a low point, with high inventories in the smartphone and consumer electronics supply chains. The demand for existing old products, especially large-volume and low-priced standard products, further declined. In comparison, the industrial and automotive sectors showed relative stability, but their scale was not sufficient enough to support the growth of the entire industry.
Zhao Haijun, Co-CEO of SMIC, stated that based on the company's performance in the first quarter and the performance guidance for the second quarter, SMIC revenue for the first half of 2023 is expected to be around US$3 billion. The company's guidance for full-year 2023 sees a low double-digit year-on-year decline in sales revenue, which also means that the SMIC's estimated sales revenue for 2023 will be around US$6.5 billion, with a gross profit margin of around 20%. Depreciation for the whole year is expected to increase by more than 20% compared to 2022, and capital expenditures are expected to be roughly flat compared to the previous year.
In the face of rapid market changes, SMIC stated that it will make necessary adjustments to the production line to prepare for the next growth cycle.
Answering questions from shareholders at the meeting regarding talent-related issues, SMIC chairman Gao Yonggang pointed out that among the company's current 20,000+ employees, there are over 10,000 engineering talents, making SMIC the domestic semiconductor foundry with the highest accumulation of talents. In addition, as the world's fourth-largest semiconductor foundry, Gao noted that the company's platform and compensation levels are highly competitive in the China's talent market.
"In terms of overall indicators, our talent attrition rate last year was relatively low, and this year should also be in single digits. We allow normal talent flow within the industry, but we can retain key talents, and these people are also willing to strive in SMIC," said Gao.
SMIC revenue analysis by application | |||||
1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | |
Smartphone | 28.7% | 25.4% | 26.0% | 28.6% | 23.5% |
IoT | 17.7% | 18.1% | 20.6% | 15.0% | 16.6% |
Consumer Electronics | 27.8% | 28.6% | 25.9% | 24.2% | 26.7% |
Others | 25.8% | 27.9% | 27.5% | 32.2% | 33.2% |
Source: SMIC Q1 2023 earnings release
