China’s largest contract chipmaker, Semiconductor Manufacturing International Corporation (SMIC), closed 2025 with stronger earnings and heavy investment, even as it signals a cautious start to 2026.
The company reported an unaudited full-year revenue of RMB 67.3 billion (about $9.33 billion), up roughly 16 percent from 2024, and net profit attributable to shareholders of RMB 5.0 billion, a 36 percent year‑on‑year increase. Fourth‑quarter revenue was RMB 17.8 billion, up nearly 12 percent from a year earlier; gross margin rose to 21 percent for the full year, and the firm said non‑recurring adjustments lifted its underlying net profit markedly.
SMIC’s production metrics underlined robust demand for the nodes it serves: year‑end equivalent 8‑inch monthly logic capacity reached 1.059 million wafers, shipments totaled about 9.7 million wafers for the year, and average capacity utilisation climbed to 93.5 percent. The company also disclosed an $8.1 billion capital expenditure in 2025 — a very large sum relative to its sales — reflecting continued wafer‑fab expansion and equipment spending.
Management framed the results as a product of two structural forces. On one hand, China’s semiconductor supply‑chain reshoring and domestic procurement pushed more work to local fabs; on the other, the cyclical weakness in memory markets presents demand uncertainty. For the first quarter of 2026 SMIC guided to revenue roughly flat quarter‑on‑quarter and a gross‑margin band of 18–20 percent. For the full year the company expects revenue growth to exceed the peer average and capex to be broadly similar to 2025, barring major external shocks.
Investors gave the update a mutedly positive reception: SMIC’s A‑shares finished higher by about 1.1 percent and its H‑shares rose about 1.7 percent on the day. The results highlight a familiar trade‑off for Chinese foundries — heavy, near‑term capital outlays to expand and upgrade capacity while navigating geopolitical limits on advanced‑node kit and the macro cycles of chip demand.
For international audiences, the numbers matter for three reasons. First, SMIC’s rising utilisation and revenue underscore sustained domestic demand for mature and specialty nodes that global tensions have made strategically important. Second, the company’s scale of investment suggests Beijing‑backed ambitions to reduce reliance on foreign fabrication, even if progress at leading nodes will be gradual. Third, the simultaneous acknowledgement of memory‑cycle headwinds signals that SMIC is not insulated from global semiconductor volatility, and that its growth will hinge on customers’ capital spending and product mix.