Huawei
SMIC reportedly hits sales hike but low profit due to costly Huawei chips
SMIC has shared the sales and profit details for 2024, and Huawei chips play a significant role in this report. However, the contribution is negative this time due to costly processors. Despite a high revenue, the chipmaker sees a drop in net profit.
The semiconductor firm detailed its Q4 2024 revenue report, where it earned $2.207 billion. It reached a new sales height regardless of the increasing US chip bans.
In Q4 2024, the chipmaker grew by 31.5% YoY. Meanwhile, Chinese media reported that the company’s annual sales revenue hiked by 27% to $8.03 billion. After lots of effort and dedication, SMIC crossed the $8 billion annual revenue bar.
Although when it comes to net profit, SMIC recorded a decline of 45.4% last year. The company made only $493 million in profit in 2024 due to a lack of investment and financial boost. And looks like the major reason behind this fall is Huawei!
The report states that SMIC has suffered from high costs to produce 7nm Kirin chips for Huawei devices on a large scale. As a result, it faced a drop in net profit.
Earlier, we reported that SMIC may risk its profit for the Huawei Mate 70 series. The chipset firm has been working on a more refined and efficient version of the Kirin chip (9020) for Mate 70 flagship and invested a lot of money in its development.
As the US continues to tighten chip controls on China, SMIC now appears to be the only option in the country. The superior Huawei Kirin chips also brought the Chinese chipmaker into the limelight and gave it immense support.
Thus, Huawei chips are seemingly the reason behind the SMIC sales rise and low net profit in 2024. Inputs further reveal that China contributed 89.1% of SMIC’s total revenue while the US owns 8.9% and Europe/Asia owns 2%.
SMIC is now expecting a notable growth of 6 to 8% in the first quarter of this year, with a gross margin of 19-21%.
SMIC reportedly hits sales hike but low profit due to costly Huawei chips (Image Credits: SMIC)
