On the evening of February 4, SMIC international, the mainland’s “big brother of chips”, disclosed a “happy and worried” performance express.
Source: Announcement source: Announcement
On the one hand, the demand for mature processes is still strong, and the company plans to expand its production capacity. At the same time, it is expected to turn losses into profits by 2020.
On the other hand, in the view of some market participants, the company’s revenue growth guidelines for the first half of 2021 are not high. “Our full year forecast is based on the assumption that the continuity of operations will not be affected. The application for export license must be based on the process, which needs time and uncertainty. Based on this, the annual revenue target is medium to high single digit growth, and the revenue target for the first half of the year is about US $2.1 billion; the annual gross profit rate target is 10% – 20% in the central region. ” Gao Yonggang, CFO of SMIC, pointed out.
He also said that looking forward to 2021, due to being included in the “entity list” by the U.S. government, the company is restricted in purchasing relevant products or technologies in the United States, which brings uncertain risks to the company’s annual performance expectations.
Fourth quarter profit increased by more than 90%
According to China’s accounting standards for business enterprises (the same below), in the fourth quarter of 2020, SMIC achieved an operating revenue of 6.671 billion yuan, a year-on-year increase of 10.3%; the net profit attributable to the parent company was 1.252 billion yuan, a year-on-year increase of 93.5%, but the net profit deducted decreased by 82% to 40.47 million yuan.
SMIC said that in the fourth quarter of 2020, the company’s wafer sales increased and the average selling price rose, and the investment income and inventory loss from government project funds, investment in joint ventures and financial assets increased.
Throughout the year, SMIC’s non audited net profit attributable to the parent company in 2020 was RMB 4.332 billion, an increase of 142% over the same period of last year; its non audited net profit deducted in 2020 was RMB 1.697 billion, corresponding to a loss of RMB 522 million in 2019. Once the non-profit state of the company is deducted in 2020 after audit, it means that the stock abbreviation of SMIC International A shares will change, that is, from “SMIC international-u” to “SMIC international”.
It is understood that the special logo “U” of the science and technology innovation board represents that the listed company has not yet made profits. After the issuer makes profits for the first time, the special logo will be cancelled. According to the Listing Rules of science and Technology Innovation Board issued by Shanghai Stock Exchange, the company’s net profit before and after deducting non recurring profit and loss in the accounting year before listing is negative. The realization of profit refers to the first time that the unprofitable scientific and technological innovation enterprises realize profit in a complete accounting year after they go public.
SMIC said that in 2020, the company will actively take epidemic prevention measures to minimize the adverse effects of the epidemic; at the same time, it will benefit from the strong demand of consumer electronics, information communication and other industries, the increase of chip usage, the overall tight production capacity of the wafer foundry industry, the strong demand for mature processes, and the growth of revenue.
Capital expenditure focuses on mature process expansion
In order to meet the needs of customers, SMIC expects to spend US $4.3 billion in 2021, most of which will be used to expand the production of mature processes (above 28nm), and a small part will be used for advanced processes (below 28nm), civil engineering and other new joint venture projects in Beijing.
SMIC said that at present, the capacity of the wafer foundry industry is tight, especially the demand for mature processes is still strong, and it is expected that the company’s mature capacity will continue to be full. The company plans to expand 10000 pieces of mature 12 inch production line and no less than 45000 pieces of mature 8 inch production line in 2021.
For advanced technology, SMIC said that under the influence of “entity list”, it will consider strengthening the development and construction of the first and second generation FinFET multi platform, and expanding the reliability and competitiveness of the platform.
It is worth noting that there is a big gap between SMIC’s capital expenditure plan in 2021 and 2020 (US $6.7 billion). According to industry analysis, the reduction of capital expenditure may be related to the company’s inclusion in the “entity list”.
In mid December last year, the US Department of Commerce listed SMIC international and some of its subsidiaries and joint-stock companies in the “entity list” on the grounds of protecting us national security and diplomatic interests. According to the relevant laws and regulations of the United States, for the products or technologies applicable to the export control regulations of the United States, suppliers must obtain the export license of the U.S. Department of Commerce to supply to the company; for the products or technologies used for 10nm and below technology nodes (including extreme ultraviolet technology), the U It may also be limited to provide OEM services to special customers.
Recruiting experts to fill the seats on the board of directors
On the evening of the same day, SMIC issued a personnel appointment announcement. From February 4, Dr. Liu Ming was appointed as the third type of independent director and a member of the strategy committee of the company for a term of office from February 4, 2021 to the annual general meeting of shareholders in 2021.
This fills the vacancy left by the resignation of Dr. Cong Jingsheng, the former independent director of SMIC, at the end of 2020. At that time, the announcement said: “the board of directors of the company will appoint new independent non-executive directors within three months from December 31, 2020 to ensure that the relevant rules can be complied with.”
According to the announcement, during his 33 year career in the semiconductor industry, Dr. Liu Ming has made contributions to the research of micro / nano fabrication, NVM devices and circuits, modeling and simulation, and reliability. He has published five books and articles, more than 300 journal papers and more than 100 conference papers. She holds many important academic positions, including the president of IEEE electronic device Association Beijing Branch.
Dr. Liu Ming’s achievements have won her many awards and honors. In 2019, she was awarded academician of the World Academy of Sciences (Twas). Dr. Liu Ming has devoted his career to education, guidance and publishing research in semiconductor technology and development.