Taiwanese and Korean manufacturers launched a first-class war, and SMIC's profits fell by 6025%！
Chinese wafer manufacturer SMIC announced its fourth-quarter and full-year 2023 results some time ago.
According to the data, SMIC's turnover in 2023 is 452500 million yuan, down 861%；Net profit was 482.3 billion yuan, down 6.0 billion year-on-year25%。
I have to say that this 60The 25% drop is quite staggering.
Why is there such a sharp drop in profits? The reason is not difficult to find, it is nothing more than two aspects: 2023 is the bottom of the semiconductor industry, with low market demand, shrinking orders, and low utilization.
Secondly, other factories are still facing huge competition, which leads to a decline in wafers and of course lower profits.
First of all, the first aspect is that the data shows that at the end of last year, SMIC accounted for a quarter of the production capacity, which is equivalent to 8060,000 pieces of 8-inch monthly production capacity, the average annual utilization rate of 75%, when idle, even if the plant is idle, under normal circumstances, the machine is idle, of course, to make a profit, the closed will not be idle.
Looking at the second aspect, due to the sluggish demand since last year, Samsung, UMC and other manufacturers are now making wafer adjustments, often reducing the % operation.
It is clear to everyone that after 2022, mobile phones, computers, and other electronics will be sold less around the world, demand will fall, orders will decrease, and factories will be forced to cut prices to fill more orders.
Eventually, the industry as a whole fell, and of course the profits of all participants fell. For example, SMIC and TSMC have both adjusted.
China's chip capacity gap has always been considered to be very large, but domestic fabs do not worry about overcapacity as long as they go all out to expand production, while domestic manufacturers are waiting for domestic capacity.
Scientists have already pointed out that by 2025, the actual domestic demand for wafers will be at least eight times the current production capacity gap of SMIC, so there is no need to worry about overcapacity.
However, in the current situation where global factories are competing, domestic factories alone cannot be immune.
Therefore, when expanding production, it is important to take into account both global industrial capacity growth and product demand.
However, the chip industry will start to recover in 2024, so SMIC's tough times are coming to an end, and there may be good days ahead, what do you think?