China's largest foundry (semiconductor contract manufacturing) company, Semiconductor Manufacturing International Corporation (SMIC), has shown significant improvement in the first quarter of this year compared to the previous year, despite strong U.S. restrictions on semiconductor technology to China. It is analyzed that the increase in domestic semiconductor production orders in China due to U.S. semiconductor sanctions and tariff barriers has contributed to the improvement in performance.
On the 9th, according to the AFP news agency and the Chinese local media Kechuangbanribaobao, SMIC announced the previous day in a disclosure to the Hong Kong Stock Exchange that the company's net profit for the first quarter was $188 million (approximately 266 billion won), a 161.9% increase compared to the previous year.
This represents a significant improvement after the total net profit last year fell sharply by about 45% compared to 2023. During the same period, revenue increased by 28.4% compared to the same period last year, recording $2.2 billion (approximately 3.1 trillion won).
Zhao Haijun, co-CEO of SMIC, stated during the earnings announcement that "the average selling price dropped due to fluctuations in factory productivity, causing revenue to fall short of the initial earnings forecast."
He added, "Although there was a temporary increase in orders from the U.S. in preparation for a rise in tariffs, the overall impact on the company's performance was minimal," and noted that "the earnings outlook for the second quarter is uncertain, with an expected revenue decrease of 4% to 6%."
CEO Zhao further emphasized, "We closely analyzed the impact of U.S. tariff policies, engaged in in-depth discussions with domestic and foreign customers, and communicated closely with the government," adding that "as a result, the direct impact of tariffs appears to be less than 1%."