BEIJING (Reuters) -China’s largest chipmaker Semiconductor Manufacturing International Corp reported on Thursday a 58.3% jump in third quarter net profit as the sector showed signs of recovery following a prolonged downturn since late 2022.
Net income totalled $148.8 million for July-September but fell short of analysts’ estimates of $199.71 million, according to LSEG data.
Revenue for the period rose by 34% to 2.17 billion, in line with market expectations of $2.2 billion, and SMIC reported a gross profit margin of 20.5%%, above its previous guidance of 18% to 20%.
Global semiconductor sales rose 23.2% to $166 billion in the third quarter, with the Chinese market growing 22.9%, according to the Semiconductor Industry Association.
SMIC, which mainly produces mature node chips for less sophisticated electronics, gained attention after teardown analyses showed it manufactured advanced chips for Huawei’s premium smartphones, including the Mate 60 launched last August and the Pura 70 series released in April.
However, analysts believe advanced chip production remains a small portion of SMIC’s business. The company has yet to significantly benefit from the artificial intelligence boom that has driven demand for advanced chips and boosted rivals like TSMC.
Capital expenditure totalled $1.2 billion for the quarter, compared with $2.13 billion in the same period last year.
(Reporting by Liam Mo and Brenda Goh; Editing by Susan Fenton)
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