<p>Hua Hong Semiconductor achieved double-digit year-on-year and quarter-on-quarter revenue growth in the third quarter, with net profit declining by 42.6% year-on-year but significantly increasing by 223.5% quarter-on-quarter. Its 12-inch wafer business accounted for 59.3% of total revenue, becoming the core engine driving the company's overall growth.</p>
<p>Looking ahead, Hua Hong Semiconductor expects sales revenue in the fourth quarter to continue to rise to between $650 million and $660 million, with gross margin expected to remain in the range of 12% to 14%.</p>
<p>On the 6th, Hua Hong Semiconductor announced its Q3 financial report:</p>
<blockquote>
<ul>
<li>Third-quarter sales revenue reached a record high of $635.2 million, a year-on-year increase of 20.7% and a quarter-on-quarter increase of 12.2%;</li>
<li>Profit attributable to the parent company was $25.7 million, a year-on-year decrease of 42.6% but a quarter-on-quarter increase of 223.5%;</li>
<li>Gross margin improved from 10.9% to 13.5%.</li>
</ul>
<p><img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/a4556f58-cfc4-49a2-811a-b4450aa0bc72.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/a4556f58-cfc4-49a2-811a-b4450aa0bc72.png"/></p>
</blockquote>
<h2>Revenue and Profit Both Improved Quarter-on-Quarter</h2>
<p>The financial report shows that Hua Hong Semiconductor's core financial indicators exhibited a positive quarter-on-quarter recovery in the third quarter. The sales of $635.2 million not only significantly surpassed the same period last year but also achieved substantial growth compared to the second quarter.</p>
<p>In terms of profitability, although the net profit of $25.7 million is still lower than last year's $44.8 million, it has achieved more than a twofold quarter-on-quarter leap compared to the second quarter's $7.95 million. <strong>This is mainly due to the operating leverage effect brought about by the expansion of revenue scale and the continuous improvement of gross margin.</strong> Data shows that the company's gross profit for the quarter was $85.85 million, a year-on-year increase of 34.1% and a quarter-on-quarter increase of 39.3%.</p>
<p>The company's expense expenditures also increased. Among them, R&amp;D expenses reached $100.4 million, a year-on-year increase of 23.3%; sales and distribution expenses and other operating costs also recorded varying degrees of growth, partially offsetting the contribution of gross margin improvement to net profit.</p>
<h2>Explosive Growth in 12-Inch Business, Becoming the Main Driver of Revenue</h2>
<p>From a business structure perspective, Hua Hong Semiconductor's &#34;8-inch + 12-inch&#34; dual-drive strategy is entering a harvest period, especially with the rise of the 12-inch business.</p>
<p>Financial report data shows that <strong>sales revenue from 12-inch wafers in the third quarter reached $376.4 million, a year-on-year surge of 43.0%, with its proportion of total revenue rising from 50.0% in the same period last year to 59.3%, for the first time dominating the company's revenue structure.</strong> In contrast, revenue from 8-inch wafers was $258.8 million, a slight year-on-year decrease of 1.6%.</p>
<p>In terms of capacity utilization, the company's 8-inch wafer fab operated at a capacity utilization rate of 109.5%, continuing to run at an overload state. This reflects that the market demand in the specialty process field remains robust.</p>
<h2>Strong Demand in Communications and Automotive Applications</h2>
<p>From the perspective of demand in different application fields, communications and industrial and automotive electronics are the main drivers of Hua Hong Semiconductor's performance growth this quarter
Data shows that <strong>sales revenue from &#34;communication&#34; products increased by 106.6% year-on-year, reaching $60.6 million,</strong> leading the growth rate among all segments. Revenue from products applied in &#34;industrial and automotive&#34; also performed well, with a year-on-year growth of 32.8% to $164.8 million, demonstrating significant achievements in the company's market expansion in high-value areas such as power devices and IGBTs.</p>
<p>At the same time, the &#34;consumer electronics&#34; sector, which is the company's largest source of revenue, reported revenue of $169 million this quarter, with a year-on-year growth of only 3.5%, indicating relatively moderate growth. Additionally, the &#34;computer&#34; sector also achieved a solid growth of 20.4%.</p>
<h2>China Market as the Main Source of Revenue</h2>
<p>By region, the Chinese market remains the primary source of revenue and growth contributor for Hua Hong Semiconductor. <strong>In the third quarter, sales revenue from mainland China was $407.5 million, a year-on-year increase of 23.2%, accounting for 64.1% of the company's total revenue.</strong> Strong domestic market demand, particularly in the localization trend of MCUs and power devices, has provided solid support for the company's performance.</p>
<p>Furthermore, revenue from other regions in Asia, North America, and Europe was $137.9 million, $79.8 million, and $137.9 million, respectively, all achieving year-on-year growth, indicating that the company's global business layout is also maintaining a good development trend</p>

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<p>HUA HONG SEMI's Q3 revenue reached USD 635.2 million, with a net profit decline of 42.6% year-on-year, but an increase of 223.5% quarter-on-quarter. Its 12-inch business accounted for 59.3% of total revenue. Looking ahead, HUA HONG SEMI expects Q4 sales revenue to continue rising to between USD 650 million and USD 660 million, with a gross margin expected to remain in the range of 12% to 14%</p>

- Hua Hong Semiconductor reported a record Q3 revenue of $635.2 million, marking a 20.7% year-over-year increase and a 12.2% quarter-over-quarter rise, despite a 42.6% decline in net profit compared to last year.  
- The 12-inch wafer business surged to $376.4 million, accounting for 59.3% of total revenue, driven by strong demand in communications and automotive applications.  
- Looking ahead, the company anticipates Q4 sales to reach between $650 million and $660 million, with gross margins expected to remain between 12% and 14%.

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HUA HONG SEMI

HUA HONG SEMI Q3 revenue increased by 20.7% year-on-year, with strong demand for 12-inch wafers, and Q4 revenue is expected to rise to USD 650-660 million | Financial Report Insights