<p>SMIC's 2025 revenue and profit both reached an ATH (All-Time High). Despite the pressure of increased depreciation, a significant rebound in the Capacity Utilization Rate drove gross margin back onto an upward trajectory, as the company maintained its position as the world's second-largest pure-play wafer foundry.</p>
<p>According to the company's announcement on the 26th, SMIC achieved a full-year 2025 revenue of $9.327 billion, 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 substantial increase in depreciation, the gross margin increased to 21%, a year-on-year increase of 3 percentage points.</p>
<p>In 2025, the company maintained high R&amp;D investment, with R&amp;D spending reaching $774 million, accounting for 8.3% of sales revenue. Monthly capacity, equivalent to 8-inch standard logic, exceeded one million wafers during the year, with the Capacity Utilization Rate rising to 93.5%, up 8 percentage points year-on-year. Full-year wafer shipments grew by 20.9% year-on-year to 9.697 million pieces.</p>
<p>For 2026, the company provided guidance in its annual report: assuming no major changes in the external environment, sales revenue growth will be higher than the average of comparable peers, and capital expenditure will be roughly flat compared to 2025. Meanwhile, the company is advancing two major transactions: the acquisition of a 49% stake in SMIC Northern through an A-share issuance, and a capital increase for SMIC Southern, where registered capital will rise from $6.5 billion to approximately $10.08 billion. The company did not declare any cash dividends, citing that expected capital expenditure for 2026 will still exceed 20% of its audited net assets.</p>
<p><img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/09db1033-ac72-4351-a6d3-26bfb610543e.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/09db1033-ac72-4351-a6d3-26bfb610543e.png"/></p>
<p><img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/08c568b8-158b-4657-b4c5-d17af1f82f47.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/08c568b8-158b-4657-b4c5-d17af1f82f47.png"/></p>
<h2>Revenue and Profit Both Hit an ATH (All-Time High)</h2>
<p>Revenue of $9.327 billion in 2025 surpassed the $7.273 billion in 2022, marking the highest annual revenue in the company's history. Revenue growth was primarily driven by shipment volume: <strong>wafer shipments increased by 20.9% year-on-year, while the average selling price (ASP) decreased slightly from $933 per wafer in the previous year to $907. Revenue from the wafer foundry business was $8.796 billion, a year-on-year increase of 17.5%.</strong></p>
<p>Profitability improved across the board. Gross profit increased by 35.1% from $1.448 billion in the previous year to $1.957 billion. Operating profit surged by 134.2% from $474 million in the previous year to $1.110 billion, mainly due to increased revenue and a year-on-year narrowing of general and administrative expenses (from $580 million to $526 million). Net profit attributable to shareholders of the parent company, excluding non-recurring gains and losses, was $576 million, a year-on-year increase of 56.0%, which was higher than the growth rate of net profit including non-recurring items, indicating improved earnings quality. EBITDA reached $5.256 billion, a year-on-year increase of 20.0%, with the EBITDA margin rising to 56.4%.</p>
<p>Notably, full-year depreciation and amortization reached $3.810 billion, an increase of approximately 18% from $3.223 billion in the previous year, with depreciation pressure continuing to rise. In this context, the gross margin still managed to increase by 3 percentage points, reflecting the positive support of the Capacity Utilization Rate and product mix optimization for profitability.</p>
<h2>Capacity Expansion Accelerates, Monthly Capacity Exceeds One Million Wafers</h2>
<p>As of the end of 2025, <strong>the company's monthly capacity, equivalent to 8-inch standard logic, reached 1.05875 million wafers, and the annual Capacity Utilization Rate reached 93.5%, up 8 percentage points year-on-year.</strong> The company's cash expenditure for property, plant, and equipment for the full year was approximately $8.4 billion, a year-on-year increase of 9.6%. At year-end, the book value of property, plant, and equipment rose to $32.558 billion, and the book value of construction in progress was $13.179 billion, reflecting a significant amount of capacity construction still underway.</p>
<p>The balance sheet structure was adjusted accordingly. The company's total interest-bearing debt increased from $11.596 billion at the end of the previous year to $12.596 billion, with borrowings reaching $12.588 billion. The weighted average effective interest rates were 1.74% for RMB-denominated debt and 3.84% for USD-denominated debt. The net debt-to-equity ratio shifted from -10.6% (net cash status) at the end of the previous year to 1.9%, as the company moved slightly from a net cash position to a net debt position. Net cash generated from operating activities was $3.194 billion, basically flat compared to the previous year.</p>
<h2>Domestic Demand Structure Diverges, Consumer Electronics Share Expands</h2>
<p>In 2025, the revenue share from the China region rose to 85.6%, further increasing from 84.6% in the previous year, as the localization substitution trend continued. <strong>From the perspective of application structure, the share of wafer sales from consumer electronics expanded from 37.8% to 43.2%, becoming the largest application category; the share of smartphones decreased from 27.8% to 23.1%; and the share of industrial and automotive categories rose from 7.8% to 11.0%, benefiting from the implementation of automotive-grade certifications and the accelerated localization of the domestic automotive electronics supply chain.</strong></p>
<p>Management noted in the annual report that strong demand for memory in AI has squeezed the supply of memory chips available for mobile phones and other consumer electronics, which may suppress terminal demand through price pass-through. However, the company's technical accumulation in sub-sectors such as BCD, analog, MCU, and mid-to-high-end display drivers allows it to maintain a favorable position.</p>
<p>In terms of R&amp;D, 2025 R&amp;D investment was $774 million, accounting for 8.3% of revenue, down from 9.5% in the previous year, mainly reflecting the expansion of the revenue base. The company achieved phased progress in several platforms, including the 28nm embedded flash memory platform and 65nm radio frequency silicon-on-insulator (RF-SOI). As of year-end, it had been granted a total of 14,511 patents, including 12,621 invention patents.</p>
<h2>Mergers and Acquisitions Progress: Acquisition of SMIC Northern, Capital Increase for SMIC Southern</h2>
<p>In September 2025, the company signed agreements with five counterparties, including the National Integrated Circuit Industry Investment Fund, to acquire the 49% stake in SMIC Northern held by the counterparties through a private placement of RMB ordinary A-shares. In December, the parties finalized the consideration and the number of shares to be issued. The proposal was approved at an extraordinary general meeting in February 2026, and the application has now been accepted by the Shanghai Stock Exchange. Upon completion, the company will hold a 100% stake in SMIC Northern, helping to improve asset quality and simplify the corporate governance structure.</p>
<p>Meanwhile, SMIC Southern completed its capital increase in December 2025, with its registered capital increasing from $6.5 billion to $10.0773 billion. Multiple parties, including Phases I, II, and III of the National Integrated Circuit Industry Investment Fund and the Shanghai Integrated Circuit Industry Investment Fund, participated in the subscription. After the increase, the company holds a 41.561% stake in SMIC Southern through SMIC Holdings and retains effective control. The company stated that the capital increase aims to reduce SMIC Southern's debt-to-asset ratio and optimize the group's financial structure.</p>
<h2>2026 Outlook: Guidance Outpacing Peers, External Risks Remain</h2>
<p>The company holds a relatively positive view of 2026 in its annual report, judging that the effects of supply chain reshoring and domestic customers replacing old products with new ones will continue, creating incremental space for the local industry chain. The guidance provided is: <strong>sales revenue growth will be higher than the average of comparable peers, and capital expenditure will be roughly flat compared to 2025.</strong></p>

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<p>SMIC reported 2025 revenue of $9.327 billion and profit of $685 million, both reaching an ATH (All-Time High). Monthly capacity exceeded one million wafers, and the Capacity Utilization Rate rose to 93.5%, driving a recovery in gross margin. The company remains the world's second-largest foundry and is advancing the integration and capital increase of SMIC Northern and SMIC Southern. Guidance for 2026 indicates that sales revenue growth will exceed the average of comparable peers, with capital expenditure remaining roughly flat compared to 2025</p>

- In 2025, SMIC achieved record revenue of $9.327 billion, a 16.2% increase, alongside a net profit of $685 million, up 39.0%.  
- The company maintained a strong capacity utilization rate of 93.5% and increased production output, while enhancing its market position through significant R&D investments and major acquisitions.  
- For 2026, SMIC anticipates revenue growth surpassing industry averages, despite ongoing external risks, and plans to maintain capital expenditures similar to 2025 levels.

SMIC’s 2025 Revenue Grew 16% YoY to an ATH (All-Time High), Net Profit Surged 39%, Monthly Capacity Exceeds One Million Wafers | Earnings Insight