SMIC has released its audited financial report for the year ending December 31, 2023, and the outlook is far from rosy.
In 2023, SMIC's revenue stood at $6.32 billion (approximately RMB 45.63 billion), a decline of 13.3%, with adjusted fluctuations better than the industry average. The gross profit margin was 19.3%, down by 18.7 percentage points, and the net profit was $900 million (approximately RMB 6.50 billion), plummeting by 50.5%.
The average annual capacity utilization rate was 75%, largely in line with the initial guidance, translating to a monthly capacity of 806,000 8-inch (200mm) wafers.
As of the end of 2023, SMIC's total assets amounted to $47.8 billion (approximately RMB 345.1 billion), with equity attributable to shareholders totaling $20.1 billion, maintaining a stable asset structure.
In an open letter to shareholders and investors, SMIC's Chairman, Dr. Liu Xunfeng, expressed the commitment to continue steadfastly pursuing the mission of "strengthening, improving, and expanding SMIC, representing the industry in international competition" in the coming year. The focus will be on four key areas: "stabilizing capacity, controlling costs, leading in technology, and prioritizing customers." The aim is to build core competitiveness in technology leadership, manufacturing capability, and cost optimization, confronting the intense competition in the global semiconductor market and the profound changes in China's semiconductor industry. The relentless dedication is aimed at providing more value to both Chinese and global markets and users, and striving tirelessly to script a new chapter in the development history of China's semiconductor industry.
Dear Shareholders and Investors,
Since its establishment, SMIC has remained steadfast in its pursuit of independent innovation, consistently maintaining a strategic focus on semiconductor manufacturing. We have persevered through challenges, striving for excellence and achieving remarkable progress, which would not have been possible without the care, support, and assistance of our valued shareholders and investors. On behalf of the Board of Directors and management team, I extend our sincerest gratitude and best wishes to you all!
In 2023, amidst unprecedented global changes and intense competition in the semiconductor market, SMIC remained united and adhered to the principle of steady progress. Despite the uncertainties in the external environment, we successfully navigated through various challenges, from technological research and development to production operations and supply chain management. Thanks to the dedication of our staff, our annual sales revenue reached $6.32 billion, with fluctuations better than the industry average. Our gross margin stood at 19.3%, and the average annual capacity utilization rate reached 75%, largely meeting our initial guidance. As of the end of 2023, our total assets amounted to $47.8 billion, with shareholders' equity at $20.1 billion, reflecting a sound asset structure and an equivalent 8-inch monthly production capacity of 806,000 wafers.
Over the past year, we accelerated strategic partnerships, actively fulfilling our role as a leading enterprise in the industry chain, fostering collaborative development and win-win cooperation throughout the supply chain. We continued to optimize project layouts, adhering to the principle of steady progress and strengthening our foundation. Key project construction tasks were completed as planned. We also made steady progress in management reform, with initiatives such as the BU system reform yielding tangible results in integrated production, sales, and research localization, significantly improving operational efficiency. Demonstrating our commitment to social responsibility and sustainable development, we enhanced our ESG governance capabilities and received widespread acclaim for initiatives like the "SMIC Caring Program."
Stability is the foundation, while progress is the direction and driving force. In the new year, we will continue to steadfastly pursue our mission of "strengthening, optimizing, and expanding SMIC, representing the industry and participating in international competition." We will plan today's business layout from the perspective of future development, evaluate our gaps against leading enterprises, and choose our partners within the industry ecosystem. Focusing on four key areas—stabilizing capacity, controlling costs, leading in technology, and prioritizing customers—we aim to build core competitiveness in technology, manufacturing, and cost efficiency. We will confront the fierce competition in the global semiconductor market and the profound changes in China's semiconductor industry, delivering more value to Chinese and global markets and users, contributing to the realization of people's happiness and sustainable social development, and tirelessly striving to write a new chapter in the history of China's semiconductor development!
Sincerely,
Liu Xunfeng Chairman SMIC Shanghai, China March 28, 2024
