China’s largest contract chipmaker, Semiconductor Manufacturing International Corporation (SMIC), reported resilient fourth-quarter results for 2025, with total operating revenue rising 11.9% year‑on‑year to RMB 17.813 billion and net profit climbing 23.2% to RMB 1.223 billion. The top‑line and bottom‑line increases signal continued demand for foundry services inside China even as global semiconductor markets remain volatile.
A notable wrinkle in the quarterly release is the divergence between net income and profit before tax: SMIC’s profit before tax fell 41.5% year‑on‑year to RMB 1.602 billion. That mismatch — stronger net profit alongside a much weaker pre‑tax figure — points to non‑operating factors such as tax adjustments, government subsidies, or one‑off accounting items influencing the headline earnings; the company’s terse bulletin does not provide an explanation in itself.
The results matter beyond a single quarter because SMIC occupies a strategic position in Beijing’s push for semiconductor self‑sufficiency. The firm is the linchpin of China’s domestic supply chain for mature and specialty process nodes, supplying chips for consumer electronics, automotive, power management and other sectors where demand has proved more stable than for bleeding‑edge logic devices.
At the same time, SMIC continues to operate under constraints imposed by U.S. export controls that limit access to advanced lithography and other cutting‑edge equipment. Those restrictions have steered the company’s roadmap toward capacity expansion in mature nodes and nurturing local supply‑chain partners rather than a rapid catch‑up to leading‑edge nodes at companies such as TSMC and Samsung.
For investors and policymakers, the quarter is a mixed signal. The revenue and net‑profit increases underscore resilience in domestic demand and effective cost or pricing management in some areas, but the plunge in pre‑tax profit raises questions about sustainability of earnings and the extent to which government support or accounting timing affected the numbers. Going forward, market attention will center on SMIC’s full annual results, capex guidance, order backlog and any disclosures that clarify the drivers behind the pre‑tax decline.
Strategically, SMIC’s performance will be watched as an indicator of how China’s broader semiconductor ecosystem weathers a period of geopolitical friction and cyclical industry shifts. Stronger domestic foundry utilization supports Beijing’s industrial policy goals, but long‑term competitiveness still hinges on technology investment, talent and access to critical equipment — variables that remain subject to political and commercial pressures.