SMIC reported a 39.8% increase in net profit for the first half of the year, with strong market demand expected to continue into the third quarter.

On the evening of August 28, Semiconductor Manufacturing International Corporation released its 2025 interim report, showing operating revenue increased 23.1% year-over-year to 32.348 billion yuan, with net profit attributable to shareholders rising 39.8% year-over-year to 2.301 billion yuan.

SMIC announced that in the first half of 2025, the industry supply chain accelerated inventory buildup and restocking, and the company actively cooperated with customers to ensure shipments. The company expects this situation to continue into the third quarter of 2025.

SMIC is a leading integrated circuit foundry enterprise. As of the close on August 28, SMIC rose 17.45% on the A-share market and 10.76% in Hong Kong stocks, with a total market capitalization reaching 578.2 billion yuan.

**Increased Gross Margin Drives Performance Growth, R&D Investment Down 9.4% Year-over-Year in First Half**

In the first half of 2025, SMIC's total profit, net profit attributable to shareholders, and adjusted net profit increased, primarily driven by higher gross margins.

In the first half of 2025, SMIC's gross profit reached 7.087 billion yuan, up 94% year-over-year; gross margin was 21.9%, an increase of 8 percentage points year-over-year.

In the first half of 2025, SMIC's wafer shipments (8-inch equivalent standard logic) increased 19.9% year-over-year to 4.682 million wafers; average selling price was 6,482 yuan, compared to 6,171 yuan in the first half of 2024.

The announcement stated that in the first half of 2025, the global semiconductor industry's output value continued to rise with supply chain synergy effects becoming apparent. However, influenced by diversified downstream application scenarios, different segments showed differentiated evolution patterns.

Specifically, leading-edge fields driven by generative AI, smart terminal chips, autonomous driving chips, and others became the core momentum contributing to overall market scale growth. The consumer electronics market received mild stimulus from smart terminal iteration and upgrades, with replacement demand for smartphones, computers, wearable devices, and other products showing gradual release. The automotive electronics field showed positive signs of bottoming out and rebounding, with supply chain localization transformation continuing to strengthen as more foundry demand returned to domestic markets.

In the first half of 2025, SMIC's integrated circuit foundry revenue by application showed that consumer electronics business revenue remained ranked first, accounting for 40.8% of main business revenue, compared to 33.4% in the first half of 2024.

As a core segment of the semiconductor industry chain, the foundry industry has formed relatively high entry barriers in terms of technological barriers, talent allocation, and continuous capital investment. The announcement noted: "Global leading companies maintain high R&D investment intensity, continuously consolidating technological advantages and focusing on building industry barriers."

In the first half of 2025, SMIC's R&D investment was 2.375 billion yuan, down 9.4% year-over-year, accounting for 7.3% of operating revenue, a decrease of 2.7 percentage points year-over-year.

**Strong Market Demand Expected to Continue Through Third Quarter, China Revenue Share Increases**

In its interim report, SMIC expects third quarter 2025 market demand to continue the momentum from the first half. The fourth quarter is the traditional off-season for the foundry industry, with rush orders and pull-forward shipments relatively slowing down.

The announcement stated that due to overall capacity being in short supply, the slowdown will not have a significant impact on the company's capacity utilization rate. Assuming no major changes in the external environment, SMIC's goal for full-year 2025 is to exceed the average of comparable peers.

SMIC is benefiting from regional development trends in the foundry industry. In the first half of 2025, SMIC's revenue from China, the United States, and Europe accounted for 84.2%, 12.7%, and 3.1% of main business revenue respectively, compared to 80.9%, 15.5%, and 3.6% respectively in the first half of 2024.

From a regional development perspective, multinational companies are currently accelerating regional supply chain restructuring, with the global supply chain system undergoing multi-dimensional adaptive transformation, as near-shore industry chain layout becomes a strategic priority for major economies.