On the evening of February 4th, SMIC announced its fourth quarter and full-year financial report for 2020. Revenue and profit were simultaneously bullish, especially the annual profit soared by more than 2 times. However, it was restricted by the US entity list and could not provide OEMs for Huawei and other customers. , 14/28nm advanced technology is severely constrained, revenue and proportion have dropped significantly.
Academician Liu Ming joins SMIC
At the same time, SMIC announced that it will usher in a semiconductor strong woman to join.
SMIC announced that starting from February 4, Dr. Liu Ming has been appointed as the company’s third-class independent non-executive director and member of the strategy committee. The salary is an annual cash remuneration of US$50,000, including US$45,000 as an independent non-executive director. , Serving as a member of the strategy committee of 5,000 US dollars, in addition to the option to subscribe for 187,500 ordinary shares, and 187,500 restricted shares.
According to his resume, Dr. Liu Ming, 56 years old, was admitted to Hefei University of Technology in 1981 and received a bachelor’s degree and a master’s degree; he obtained a doctorate degree from Beijing University of Aeronautics and Astronautics in 1998; Director of the Research Office of Processing and New Device Integration Technology; In 2008, he was awarded the National Science Fund for Distinguished Young Scholars; he was elected as an academician of the Chinese Academy of Sciences in 2015; he was appointed as the dean of the National Demonstration Institute of Microelectronics at the University of Science and Technology of China in 2018, and he was elected as an academician of the Academy of Sciences for Developing Countries in the same year . In 2019, Liu Ming was awarded the Fellow of the World Academy of Sciences (TWAS).
The picture shows Academician Liu Ming giving a keynote speech at the 2019 China Integrated Circuit Design Conference
Academician Liu Ming has long been committed to the research of the semiconductor industry. He served as an assistant professor at Yantai University from 1988 to 1995, joined the Institute of Microelectronics of the Chinese Academy of Sciences as an associate professor in 1999, served as a professor from 2000 to 2020, and joined Fudan University as a professor in 2021. Independent non-executive director of Zhisheng Intelligent Technology.
Academician Liu Ming has been in the semiconductor industry for 33 years and has contributed to research on micro/nano processing, NVM devices and circuits, models and simulations, and reliability. He has published 5 books and articles, and more than 300 journal papers. , More than 100 conference papers (including more than 40 keynote speeches or invited papers), and held many important academic positions, including the chairman of the IEEE Electronic Devices Society (EDS) Beijing branch, the editor of EDS Newsletter and Journal of Semiconductors.
Financial Report Interpretation: Due to U.S. sanctions, many data in Q4 financial reports declined
According to SMIC’s financial report, revenue for the fourth quarter of 2020 was US$981 million, which is a 16.9% increase from the same period in 2019, but a decline of 9.4% from the third quarter of 2020. The gross profit margin for the fourth quarter of 2020 was 18%, a decline of 5.8 percentage points from the same period in 2019, and a similar decline of 6.2 percentage points from the third quarter of 2020. Gross profit was US$176.7 million, a 11.4% decline from the same period in 2019, and a 32.5% decline from the third quarter of 2020.
As for the operating profit in the fourth quarter of 2020 to 17.429 million US dollars, not only a 14.4% decline from the same period in 2019, but also a Sharp decline of 90.6% from the third quarter of 2020. Although the net profit for the quarter reached US$228.6 million, it was up 202.1% from the same period in 2019, and it was down by 13.2% from the third quarter of 2020. However, according to the financial report data, the government project funds in the fourth quarter of 2020 will be injected into US$125 million, which means that more than half of the profit in the fourth quarter of 2020 will come from government funds.
As for the process development of SMIC, according to the financial report, the largest revenue source in the fourth quarter of 2020 is still on the 55/65 nanometer process node, accounting for 34%. This part surpasses the 0.15/ 0.18 which has been the number one in the past. Micron process accounts for 32.5% of revenue. In addition, the 40/45 nanometer process accounted for 14.8%, the 0.11/0.13 micron process accounted for 6.2%, the 0.25/0.35 micron process accounted for 4%, and the 90-nanometer process accounted for 3.5%. As for the 14/28 nanometer process revenue ratio that everyone is concerned about, the two figures have merged since the first quarter of 2020, and it is impossible to see the actual ups and downs of the two. However, the total revenue share of the two in this quarter dropped from 14.6% in the third quarter to only one-third of the 5%, which is even lower than the 6% in the same period in 2019.
As for the operating outlook for the first quarter of 2021, SMIC pointed out that quarterly revenue will increase by 7% to 9% compared to the fourth quarter of 2020. The gross profit margin is in the range of 17% to 19%. As for the whole year of 2021, due to being included in the list of entities by the US government, the procurement of related products or technologies in the United States is restricted, which brings uncertain risks to the full-year performance forecast. Therefore, the whole year expectation is based on the premise that the continuity of operations will not be affected. The export license application must follow the process, which takes time and has certain uncertainty. Based on this, the expected full-year revenue target for 2021 is mid-to-high single-digit growth, while the revenue target for the first half of the year is approximately US$2.1 billion, and the full-year gross profit target is 10% to 20% in the central region.
In 2021, the total amount of capital expenditure will be US$4.3 billion. Among them, most are used for the expansion of mature manufacturing processes, and a small part is used for advanced manufacturing processes, the civil construction of Beijing’s new joint venture projects and other projects. In terms of capacity construction, SMIC also expects that the 12-inch production line with a mature process will expand by 10,000 pieces in 2021, and the mature 8-inch production line will expand by no less than 45,000 pieces.
In addition, it is worth noting that Liang Mengsong, who will resign as the co-chief executive officer of SMIC, has previously been reported because his views on this quarter’s performance were also published in the financial report, which shows that Liang Mengsong is indeed still staying at SMIC.
The Links: 1DI300A-120 2MBI300S-120