HONG KONG: Hong Kong-listed Semiconductor Manufacturing International, China’s leading contract chipmaker, said net profit for the fourth quarter ended Dec. 31 fell 54.1% to $47.72 million from $104 million in the same period the previous year.
Revenue for the Shanghai-based company fell 3.4% year-on-year to $787.2 million in the period from $814.8 million in the same quarter of 2016, SMIC said in a statement.
Annual revenue for 2017 rose 6.4% on-year, in line with the foundry industry growth rate, Zhao Haijun and Liang Mong Song, co-CEOs, said. “At the same time the overall industry dynamic has become more volatile with increased competition and pricing pressure,” they added.
Looking ahead to the first quarter of this year, the company said it expects revenue to increase by 7%-to-9% on-quarter, including technology licensing revenue estimated at $150 million. On-quarter, net profit rose 84.2% in the October-December period, while revenue grew 2.3% as the company shipped more wafers.
While China’s contribution to revenue increased on-quarter, North America’s declined. Gross margin shrank to 18.9% in the latest quarter from 23.0% in the previous quarter and 30.2% in the year-ago period primarily due to a change in the product mix, the company said.
The stock fell 3.1% as of 9:52 a.m. in Hong Kong on Friday, while the benchmark Hang Seng Index lost 2.8%.
