SMIC's co-CEO Zhao Haijun stated during an earnings call that although the fourth quarter is traditionally a slow season for the industry, with customers slowing inventory buildup, the iterative effects of the supply chain continue to drive demand. As a result, the company's production lines remain in a state of undersupply. Estimates indicate that SMIC's full-year sales revenue is expected to surpass $9 billion, marking a new milestone in revenue growth.

SMIC executives noted that the memory market is currently undersupplied, leading to significant price increases. From the perspective of the foundry and memory industries, capacity expansion in the coming year will only accelerate, not slow down.

Goldman Sachs maintains a "Buy" rating on SMIC, citing its third-quarter revenue as exceeding both market expectations and management's guidance of 5%-7% quarterly growth. Gross margins also outperformed guidance (18%-20%) and expectations. SMIC's Q4 revenue guidance of 0%-2% growth is largely in line with market expectations. Driven by growing demand from local clients and AI-related opportunities, the firm remains optimistic about SMIC's long-term growth potential. The target price is set at HK$117 and RMB 211.

SMIC's Q3 net profit surged 43.1% year-on-year, with capacity utilization climbing to 95.8%, nearing full production. The latest financial report shows Q3 revenue reached RMB 17.162 billion, up 9.9% year-on-year, while gross margin expanded 4.8 percentage points quarter-on-quarter to 25.5%. Capacity utilization rose to 95.8%, reflecting robust demand.

Key financial highlights: - Q3 revenue: RMB 17.162 billion, up 6.9% QoQ and 9.9% YoY; Jan-Sept revenue: RMB 49.51 billion, up 18.2% YoY. - Q3 gross margin: 25.5%, up 4.8 ppts QoQ; Jan-Sept gross margin: 23.2%, up 5.6 ppts YoY. - Q3 net profit attributable to shareholders: RMB 1.517 billion, up 43.1% YoY; Jan-Sept net profit: RMB 3.818 billion, up 41.1% YoY. - Capacity utilization: 95.8%, up 3.3 ppts QoQ.

SMIC's Q4 guidance projects flat to 2% revenue growth quarter-on-quarter, with gross margins between 18%-20%. This suggests a notable slowdown in revenue growth despite near-full capacity utilization, while the median gross margin of 19% represents a roughly 6-percentage-point decline from Q3's 25.5%.