SMIC's 2025 revenue increases by 16% year-over-year to a record high, net profit surges by 39%, and monthly production capacity exceeds one million wafers | Financial Report Highlights

SMIC’s revenue and profit both reached historic highs in 2025. Under the pressure of rising depreciation, the capacity utilization rate significantly rebounded, driving the gross profit margin back onto an upward trajectory. The company maintained its market position as the second-largest pure wafer foundry globally.

According to the company’s announcement on the 26th, SMIC achieved full-year revenue of $9.327 billion in 2025, a year-on-year increase of 16.2%; net profit attributable to shareholders of the parent company was $685 million, up 39.0% year-on-year; despite a significant increase in depreciation, the gross profit margin rose to 21%, an increase of 3 percentage points year-on-year.

In 2025, the company continued to maintain high R&D investment, with R&D expenditure of $774 million, accounting for 8.3% of sales revenue. The monthly production capacity, equivalent to 8-inch standard logic, exceeded one million pieces during the year, with the capacity utilization rate rising to 93.5%, an increase of 8 percentage points year-on-year. The total wafer shipment volume increased by 20.9% year-on-year to 9.697 million pieces.

For 2026, the company provided guidance in its annual report: assuming no significant changes in the external environment, the growth rate of sales revenue will exceed the average of comparable industry peers, and capital expenditure will be roughly on par with 2025. Meanwhile, the company is advancing two significant transactions: acquiring 49% of the equity of SMIC North through the issuance of A-shares, and increasing the registered capital of SMIC South from $6.5 billion to approximately $10.08 billion. The company has not declared any cash dividends, citing that capital expenditures are expected to exceed 20% of audited net assets in 2026.

Revenue and profit both reach historic highs

In 2025, revenue reached $9.327 billion, surpassing the $7.273 billion of 2022, becoming the highest annual revenue in the company’s history. Revenue growth was mainly driven by shipment volume: wafer shipment volume increased by 20.9% year-on-year, while the average selling price slightly decreased from $933 per piece last year to $907. Revenue from wafer foundry services was $8.796 billion, a year-on-year increase of 17.5%.

Profitability improved across the board. Gross profit rose from $1.448 billion last year to $1.957 billion, an increase of 35.1%. Operating profit surged significantly by 134.2% from $474 million last year to $1.110 billion, primarily benefiting from increased revenue and a narrowing of general administrative expenses (from $580 million down to $526 million). Net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses was $576 million, a year-on-year increase of 56.0%, with growth outpacing net profit including non-recurring gains and losses, indicating improved profit quality. EBITDA reached $5.256 billion, a year-on-year increase of 20.0%, with EBITDA margin rising to 56.4%.

It is noteworthy that the depreciation and amortization amount for the year reached $3.810 billion, an increase of approximately 18% from last year’s $3.223 billion, with depreciation pressure continuing to rise. Against this backdrop, the gross profit margin was still able to increase by 3 percentage points, reflecting the positive support of capacity utilization and product mix optimization on profitability.

Capacity expansion accelerates, monthly capacity exceeds one million pieces

As of the end of 2025, the company’s monthly production capacity, equivalent to 8-inch standard logic, reached 1.05875 million pieces, with the annual capacity utilization rate at 93.5%, an increase of 8 percentage points year-on-year. The company incurred cash expenditure of approximately $8.4 billion on real estate, factories, and equipment throughout the year, a year-on-year increase of 9.6%. By the end of the year, the book value of real estate, factories, and equipment rose to $32.558 billion, with construction in progress valued at $13.179 billion, reflecting ongoing capacity construction.

The balance sheet structure has been adjusted accordingly. The total interest-bearing debt increased from $11.596 billion at the end of last year to $12.596 billion, with borrowings reaching $12.588 billion, and the weighted average effective interest rates were 1.74% for RMB-denominated and 3.84% for USD-denominated debt. The net debt-to-equity ratio shifted from -10.6% at the end of last year (indicating a net cash position) to 1.9%, marking the company’s slight transition from a net cash position to a net debt position. The net cash generated from operating activities was $3.194 billion, roughly flat compared to last year.

Domestic demand structure diversifies, consumer electronics share expands

In 2025, the revenue share from the China region rose to 85.6%, up from 84.6% last year, continuing the trend of localized substitution. From an application structure perspective, the sales share of wafers for consumer electronics expanded from 37.8% to 43.2%, becoming the largest application category; the share for smartphones decreased from 27.8% to 23.1%; while the share for industrial and automotive applications increased from 7.8% to 11.0%, benefiting from the implementation of automotive-grade certification and the acceleration of localization in the domestic automotive electronics supply chain.

The company’s management pointed out in the annual report that the strong demand for storage due to artificial intelligence is squeezing the supply of storage chips available for smartphones and other consumer electronics, which may suppress terminal demand through price transmission. However, the company’s technical accumulation in segmented areas such as BCD, analog, MCU, and mid-to-high-end display drivers allows it to maintain a favorable position.

In terms of R&D, the R&D expenditure in 2025 was $774 million, accounting for 8.3% of revenue, a decrease from 9.5% last year, mainly reflecting the expanded revenue base. The company made phased progress in several platforms, including the 28nm embedded flash memory platform and the 65nm RF SOI platform. By the end of the year, a total of 14,511 patents had been granted, including 12,621 invention patents.

M&A integration underway: acquiring SMIC North, increasing capital in SMIC South

In September 2025, the company signed an agreement with the National Integrated Circuit Fund and five other transaction parties to acquire a total of 49% equity of SMIC North through a targeted issuance of RMB ordinary shares (A-shares). In December, the parties finalized the transaction price and the number of shares to be issued, and the temporary shareholders’ meeting in February 2026 approved the proposal. The application has now been accepted by the Shanghai Stock Exchange. Upon completion of the transaction, the company will hold 100% equity of SMIC North, which will help improve asset quality and simplify the corporate governance structure.

Meanwhile, SMIC South completed its capital increase in December 2025, raising its registered capital from $6.5 billion to $10.0773 billion, with participation from various parties including the National Integrated Circuit Fund’s first, second, and third phases, as well as the Shanghai Integrated Circuit Fund. After the capital increase, the company’s shareholding ratio through SMIC Holdings in SMIC South is 41.561%, and the company still retains actual control. The company stated that this capital increase aims to reduce the debt-to-equity ratio of SMIC South and optimize the group’s financial structure.

2026 outlook: guidance for growth outpacing peers, external risks remain

The company holds a relatively optimistic attitude towards 2026 in its annual report, judging that the effects of the overseas return of the supply chain and the replacement of old products by new products from domestic customers will continue to create incremental space for the local supply chain. The guidance provided by the company is: the growth rate of sales revenue will exceed the average of comparable industry peers, and capital expenditure will be roughly on par with 2025.

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