SMIC's revenue rose 10.3 percent year-on-year to RMB6.671 billion ($1.03 billion) in the fourth quarter of 2020, while gross margin fell 5.8 percentage points to 18.0 percent, the leading contract chipmaker from China said in an earnings release on Thursday.
Net income attributable to SMIC shareholders for the quarter was RMB 1.252 billion, up 93.5 percent year-on-year.
SMIC said the increase in revenue and profit in the fourth quarter was mainly due to higher revenue from increased wafer sales and higher average selling prices, increased funding for government projects, and higher investment income from investments in affiliates and financial assets.
For the full year 2020, SMIC's revenue increased by 25.4% to RMB25.250 billion and gross margin increased by 7.1 percentage points to 23.6%.
Net income attributable to SMIC shareholders for 2020 was RMB4,627 million, an increase of 204.9 percent year-over-year.
Looking ahead to the first quarter of 2021, SMIC expects revenue growth of 7-9% YoY and a gross margin of 17-19%.
SMIC stated that restrictions on the procurement of US-related products or technologies due to its inclusion on the US government's entity list have created uncertain risks to performance expectations.
SMIC's export license application also takes time and is subject to uncertainty, the company said.
Based on this, SMIC expects to target mid- to high-single-digit revenue growth (5-9 percent) for the full year of 2021.
The company expects to target revenue of about $2.1 billion in the first half of 2021, with a full-year gross margin target of mid 10-20 percent.
In addition, under the influence of the entity list, SMIC will consider strengthening the development and deployment of the first and second-generation FinFET multiplex platform and expanding the reliability and competitiveness of the platform.
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