Tech war: China's top foundry SMIC reports revenue growth in 2024, but net profits plunge
China's top foundry Semiconductor Manufacturing International Corp (SMIC) said its revenues in 2024 reached an all-time high, but net profit almost halved from a year earlier, an indication of the increasing competition in legacy chip production on the mainland.
Advertisement
In its annual report filed to the Hong Kong stock exchange on Thursday, the company said full-year revenue grew 27 per cent to US$8 billion but net profit plunged 45.4 per cent to US$493 million. Its shares lost 3.4 per cent on Friday morning.
Meanwhile, China's No 2 wafer fab,
Hua Hong Semiconductor, said in its annual report on Thursday that 2024 revenue fell 12.3 per cent year on year to US$2 billion, with profit sliding 79.2 per cent to US$58 million. Hua Hong's stock in Hong Kong lost 3.3 per cent in the morning session.
The sluggish profit performance of China's top two fabs comes as competition in the domestic market has intensified, while US export controls have made it harder for SMIC to move up to more lucrative advanced node production.
The consumer electronics segment was SMIC's top customer for wafer sales. Photo: Digitimes
In comparison, the world's top foundry,
Taiwan Semiconductor Manufacturing Co (TSMC), said earlier that its net profit for 2024 surged nearly 40 per cent from a year earlier to hit an all-time high of US$35 billion, or over 70 times that of SMIC, even though TSMC's revenue was about 12 times SMIC's.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
RTHK
2 hours ago
- RTHK
Tech losses lead Hang Seng Index to lower close
Tech losses lead Hang Seng Index to lower close The benchmark Hang Seng Index ended the day down 331.56 points, or 1.36 percent, to close at 24,035.38. File photo: RTHK Stocks in mainland China and Hong Kong ended mostly lower on Thursday, led by declines in the tech sector, as markets struggled to sustain the positive momentum from the Sino-US trade talks that lacked concrete details. In Hong Kong, the benchmark Hang Seng Index ended the day down 331.56 points, or 1.36 percent, to close at 24,035.38. The Hang Seng China Enterprises Index slid 1.53 percent to end at 8,729.96 while the Hang Seng Tech Index slumped 2.20 percent to 5,331.33. Mainland Chinese stocks ended up mixed, with the benchmark Shanghai Composite Index up 0.01 percent at 3,402.66 and the Shenzhen Component Index closed 0.11 percent down at 10,234.33 The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, gained 0.26 percent to close at 2,067.15. Among major losers, chipmaker SMIC fell 2 percent to a one-week low. Alibaba weakened 3.2 percent and EV maker Xpeng slid 6.7 percent. The CSI Rare Earth Index closed flat after slipping nearly 1 percent in the morning session and continued to hover near its seven-month high. A trade truce between the world's two biggest economies was back on track, US President Donald Trump said, a day after negotiators from Washington and Beijing agreed on a framework to ease bilateral retaliatory tariffs. Under the agreement, Beijing will lift export curbs on rare earth minerals and the United States will restore Chinese students' access to its universities, Trump said on Truth Social. Yet the terms remain subject to final approvals, with details notably absent. The 55 percent tariffs on Chinese imports will also stay, US Commerce Secretary Howard Lutnick said. "We still don't know if what Trump says will actually happen. It's disappointing that the tariffs rates were not dialled down at all and tech curbs on China were not even mentioned," said Jason Chan, senior investment strategist at Bank of East Asia, Hong Kong. The talks left key issues, like chip exports, unaddressed, leaving room for conflicts in the future, and no one knows for how long the current truce will last, he added. Chinese markets have been struggling to recover from trade shocks for the past two months after Trump announced sweeping tariffs on April 2 that threatened the global trade system. The CSI 300 Index has barely eked out any gains since then, while the Hang Seng Index has climbed 3.5 percent, but the two are underperforming the nearly 10 percent bounce in the MSCI World Index . The market is less sensitive to trade talks and investors are shifting focus to economic fundamentals, Wang Zhuo, partner at Zhuozhu Investment, said. "The key for China now is to bolster manufacturers' confidence and break the deflationary trend." (Reuters/Xinhua)
HKFP
3 hours ago
- HKFP
Australia's Qantas to close budget carrier JetStar Asia
Australian airline Qantas said Wednesday it will close its loss-making budget carrier Jetstar Asia, axing 500 Singapore-based jobs. The low-cost subsidiary will cease operations on July 31 as part of a 'strategic restructure', Qantas group chief executive Vanessa Hudson said. Qantas is 'incredibly proud' of the Jetstar Asia team, Hudson said in a statement. 'This is a very tough day for them. Despite their best efforts, we have seen some of Jetstar Asia's supplier costs increase by up to 200 percent, which has materially changed its cost base.' Passengers with cancelled flights on the Singapore-based regional carrier — which flies to 16 Asian destinations — will be offered refunds, Qantas said. Jetstar Asia was expected to make an underlying loss of Aus$35 million (US$23 million) this financial year prior to the closure decision, according to Qantas, which owns 49 percent of the carrier. The Asian regional carrier's 500 staff will be laid off and receive redundancy benefits as well as help finding new jobs, the Australian group said. Jetstar Asia's 13 A320 aircraft will be progressively redeployed to Australia and New Zealand, Qantas said, creating more than 100 local jobs. Shutting the carrier would deliver up to Aus$500 million (US$326 million) for Qantas to support the group's fleet renewal program, it said. Qantas said the decision to shutter Jetstar Asia was taken together with the offshoot's 51-percent shareholder, Westbrook Investments.
South China Morning Post
4 hours ago
- South China Morning Post
Massed drone deployments part of military modernisation: China's PLA Daily
China's military mouthpiece has called for the large-scale and centralised deployment of unmanned combat forces at key locations to fully realise their potential in any future intelligent warfare, amid rising tensions with the US in the Indo-Pacific. Advertisement In an article published on Tuesday, the PLA Daily urged 'innovative' organisation and applications of unmanned systems , highlighting their 'decisive and dominant' role in future conflicts, including the capability to conduct close-range precision strikes. 'Driven by technologies such as autonomous unmanned systems and advanced networks, unmanned combat innovation is undergoing dramatic transformation,' the article said. 'We must move beyond traditional thinking, abandon the conventional use of unmanned systems as merely auxiliary forces, and develop a new operational theory centred on their large-scale, centralised deployment.' Citing Russia and Ukraine's efforts to build unmanned systems forces, as well as the US Defence Department's Replicator initiative – which aims to field thousands of unmanned systems across air, land, sea, and space within the next two years – the PLA Daily argued that the idea of massed deployment of unmanned systems had become a 'consensus' in military modernisation. Advertisement 'The next phase of competition will focus on which side can rapidly concentrate the necessary systems and personnel, pioneer new models of organisation and deployment, and lead the way in building an unmanned force with cutting-edge technology and tactics,' it said. US-China competition in UAVs and unmanned systems is a key front in their intensifying strategic and technological rivalry, particularly amid the rising tensions in the Taiwan Strait and the South China Sea.
