SMIC(00981)2025-04-09 08:30Financial Performance - The total sales revenue for 2024 reached 8,029.9 million, a 27.0% increase from 492.7 million, a decrease of 45.4% compared to 4,379.7 million, reflecting a 7.8% increase from 3,175.6 million in 2024, a 5.4% decrease from 473,900 thousand, an increase from 8,029.9 million in the reporting period, representing a year-on-year increase of 27.0%[53]. - The net profit for the year was 1,124,935 thousand in 2023[49]. - The company reported a decrease in the number of wafers shipped to 8,020,798 in 2024 from 5,866,683 in 2023, indicating a significant increase in production capacity[49]. - The average selling price of wafers decreased to 988 in the previous year[108]. - The cost of sales rose by 29.0% to 6,582.0 million, primarily due to increased wafer sales volume and depreciation[109]. Research and Development - R&D expenses accounted for 9.5% of total revenue in 2024, a decrease of 1.7 percentage points from 11.2% in 2023[37]. - The company incurred a total of 765,279 thousand in research and development expenses for 2024, compared to 707,275 thousand in 2023[49]. - R&D expenses for 2024 amounted to 765.3 million, representing an 8.2% increase from 707.3 million in 2023, with R&D expenses accounting for 9.5% of total revenue, down 1.7 percentage points from the previous year[70]. - The R&D team consists of 1,268 master's degree holders and 498 doctoral degree holders, indicating a strong educational background[74]. - The company is focusing on developing advanced technology platforms, including 28nm ultra-low leakage technology and 55nm high-voltage display technology, with several products already in mass production[71]. - SMIC's R&D efforts are concentrated on various projects, including 0.18-micron embedded storage technology and 8-inch high-voltage display driver technology, with ongoing developments aimed at meeting diverse market needs[71]. Market and Industry Trends - The semiconductor market is showing signs of recovery, with demand from smartphones, personal computers, and consumer electronics gradually stabilizing[53]. - The semiconductor demand in the automotive sector is entering a cyclical adjustment phase, with inventory digestion slowing down[62]. - The global semiconductor industry is characterized by cyclical and growth trends, with short-term supply-demand imbalances not affecting long-term prospects[53]. - The semiconductor industry is experiencing a trend towards localization, with countries actively expanding domestic wafer foundry capacity[161]. - The semiconductor industry in China still faces challenges in matching production capacity and technological capabilities with actual market demand[62]. Strategic Initiatives - The company is focused on innovation-driven growth, enhancing core competitiveness, and achieving multiple historical highs in operational metrics[19]. - Strategic collaborations with leading companies in consumer electronics, automotive, IoT, industrial control, and AI sectors are being deepened[19]. - The company is committed to sustainable development, actively pursuing carbon reduction responsibilities and building green factories[19]. - The company aims to deepen reforms and promote high-quality development in 2025, focusing on strategic planning and innovation in the semiconductor industry[20]. - The company is committed to building a platform-based ecosystem service model, providing one-stop services including design services and IP support[54]. - The company is focusing on optimizing resource allocation and enhancing core business development through strategic asset sales[158]. Risks and Challenges - The company faces risks related to technology upgrades and the potential shortage of skilled technical personnel in the competitive integrated circuit industry[82]. - Supply chain risks are present due to reliance on a limited number of qualified suppliers for critical materials and components, which could lead to production disruptions if shortages or price increases occur[88]. - Financial performance may fluctuate due to macroeconomic conditions, industry cycles, and capital expenditures related to capacity expansion and R&D investments[89]. - The company is exposed to asset impairment risks, particularly if market conditions lead to significant declines in asset values, potentially affecting profitability[90]. - Currency and interest rate fluctuations pose risks, as the company operates in multiple currencies and has floating-rate debt, which could affect financial results[92]. - Intense competition in the global wafer foundry market may hinder the company's ability to maintain market share and profitability if it fails to innovate and expand capacity[95]. - Macroeconomic volatility and geopolitical tensions could negatively affect market demand and supply chain stability, impacting the company's operations[96][97]. Corporate Governance - The company has adopted a corporate governance policy since January 25, 2005, and has complied with all provisions of the corporate governance code applicable to its listings[191]. - The company has established a board of directors with independent non-executive directors to enhance decision-making objectivity[192]. - The company's financial statements have been audited by Ernst & Young[190]. - The company has maintained compliance with relevant laws and regulations that significantly impact its business and operations[190]. Investments and Financial Position - The total assets as of December 31, 2024, were 49,161.2 million, a 2.9% increase from 17,291,590 thousand as of December 31, 2024, slightly up from 11,596.0 million, with a net debt position of $(3,367.0) million[138]. - The net debt-to-equity ratio improved to -10.6% in 2024 from -21.1% in 2023, indicating a stronger equity position[148]. - The company has a distributable reserve of USD 6,173.1 million as of December 31, 2024[169]. - The company has no plans to declare or pay any cash dividends on ordinary shares[167].