A few days ago, SMIC released its results for the fourth quarter ending December 31, 2020. According to Dr. Gao Yonggang, SMIC's chief financial officer, revenue for the fourth quarter in 2020 was $981 million, with a gross profit margin of 18.0%. For the whole year, a number of financial indicators (unaudited) of the company reached an all-time high. Annual revenue was US $3.907 million, up 25.4%; gross profit was US $921 million, up 43.3%; profit attributable to the company was US $716 million, up 204.9%; profit before interest, tax, depreciation and amortization was US $2,123 million, up 54.6%.
Interpretation of revenue situation: the contribution of 14/28nm revenue decreases sharply
According to reports, the company's monthly production capacity increased from 510150 8-inch wafers in the third quarter of 2020 to 520750 8-inch wafers in the fourth quarter of 2020, mainly due to the capacity expansion of the Beijing 300mm fab controlled in the fourth quarter of 2020. However, in terms of capacity utilization, it has declined compared with the third quarter.
From the perspective of regional revenue contribution, as shown in the following figure, SMIC's main source of revenue for Q4 in 2020 comes from mainland China and Hong Kong. But the region's share has fallen significantly compared with 69.7% in the third quarter. In contrast, North American customers (the reported revenue comes from companies headquartered in the United States but eventually sell and sell products to customers around the world. ) the revenue contribution increased from 18.6% in the previous quarter to 27.7% in the current quarter. Compared with 2019, there is also a big increase.
In terms of application, SMIC's chips are mainly used in smartphones, but there is a significant decline compared with the third quarter of 2020 and the same period last year. Consumer electronics chips are the second largest category of chips in the company, while smart homes rank third.
Let's take a look at the revenue share of different nodes that we are concerned about. From the picture above, we can see that in the fourth quarter of 2020, the revenue growth momentum of 14/28nm process has declined sharply, falling back to the level of a year ago in the revenue share of different nodes of SMIC in the fourth quarter of 2020. On the one hand, it is believed to be related to SMIC's entry into the entity list, causing customers to change orders in panic; on the other hand, Huawei Hayes has entered the entity list, which also has an impact on SMIC's revenue.
As for other mature nodes, 55/65nm made the largest contribution to revenue, followed by 0.15 0.18 microns, followed by 40/45nm.
Future planning: strengthening the development and construction of the first-generation and second-generation FinFET multi-platform
When it comes to the current capacity situation and future planning, let's take a look at SMIC's R & D investment. According to the introduction. The company's research and development spending increased to US $194.4 million in the fourth quarter of 2020, compared with US $158.5 million in the third quarter of 2020, mainly due to an increase in R & D activities in the fourth quarter of 2020. Compared with the previous quarter, SMIC's R & D investment increased by more than 100% in the fourth quarter.
When it comes to capital expenditure, SMIC said it spent $1,333.4 million in the fourth quarter of 2020, compared with $2,279.7 million in the third quarter of 2020. Capital expenditure of US $5.7 billion in 2020 is mainly used for capacity expansion of Shanghai 300mm fab, Beijing 300mm fab, and Tianjin 200mm fab, which have actual control. The capital expenditure plan for 2020 was revised down from US $5.9 billion to US $5.7 billion, mainly due to the extended or uncertain supply period of some machines caused by the US entity list and delays in the arrival of some machines due to logistics reasons. The planned capital expenditure for 2021 is about US $4.3 billion, most of which will be used for production expansion of mature processes, and a small portion will be spent on advanced technologies, civil engineering of new joint venture projects in Beijing and others.
Dr. Zhao Haijun, SMIC's co-CEO and Dr. Liang Mengsong also commented: "at present, the wafer foundry industry is tight, especially the demand for mature processes is still strong, and it is expected that the company's mature capacity will continue to be fully loaded. In order to meet the needs of customers, the company expects capital expenditure of US $4.3 billion this year, most of which will be used for production expansion of mature processes, and a small portion will be spent on advanced technologies, civil engineering of new joint venture projects in Beijing and others. In terms of production capacity construction, we plan to expand 10, 000 pieces of mature 12-inch production line and no less than 45000 pieces of mature 8-inch production line this year. Under the influence of the entity list, we will consider strengthening the development and deployment of the first-and second-generation FinFET multi-platform, and expanding the reliability and competitiveness of the platform. "
Looking forward to full-year development in 2021, SMIC said that because it was included in the entity list by the US government, the company was restricted in purchasing US-related products or technologies, posing an uncertain risk to the company's full-year performance forecast. Our full-year expectations are based on the assumption that operational continuity will not be affected. The application for export license must follow the process, which takes time and there is a certain degree of uncertainty. Based on this, our full-year revenue target is medium to high single-digit growth, with a revenue target of about US $2.1 billion for the first half of the year, and a full-year gross profit margin target of 10% to 20%. "
![[SMM Analysis] Supply Shocks Support High Molybdenum Prices Downstream Pressure Restricts Upside](https://imgqn.smm.cn/production/admin/news/cn/thumb/RWipd20171024152142.jpeg?imageView2/1/w/176/h/110/q/100)
