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Do you know who is the dark horse in the semiconductor field lately? That's right, it's our own SMIC! According to the latest financial report, SMIC's revenue and market performance in the first quarter of 2024 are so bright that it will not be able to do so, and it will directly jump to become the world's second largest wafer foundry.
Recall that a few years ago, SMIC was just one of many wafer foundries, who would have thought that just a few years later, it would stand up and become the second largest in the world after TSMC?
First of all, we have to talk about SMIC's "record" in this financial report. In the first quarter of 2024, their revenue reached $1.75 billion, an increase of nearly 20% year-on-year, which is one of the best in the world.
This figure is even more eye-catching compared to their rivals UMC and GF, whose revenues are $1.71 billion and $1.549 billion, respectively, which are not at SMIC's level.
So how did SMIC do it? There are three reasons: technological progress, market layout and capacity improvement. In terms of technology, SMIC is very mature in the manufacturing of 12-inch wafers, accounting for 75.6% of its total revenue, and 8-inch wafers also account for 24.4%.
In terms of market layout, SMIC can be said to be blooming everywhere. From smartphones to computers and tablets to consumer and automotive electronics, they touch almost every field of semiconductor applications.
Especially in the Chinese market, their revenue accounted for a staggering 81.6%, which also reflects the huge demand for semiconductors in the Chinese market.
Increasing production capacity is also key. By the first quarter of 2024, SMIC's monthly production capacity has increased from 805,500 pieces to 814,500 pieces of 8-inch wafer equivalent, and the utilization rate is as high as 80.8%. This expansion and efficiency improvement allows them to better meet the needs of the market.
Behind these figures is SMIC's confidence in the future and its accurate grasp of market trends. They expect sales revenue to continue to grow by 5% to 7% sequentially in the second quarter, and gross margin will also remain between 9% and 11%.
In the face of global competition, SMIC has not only not been crushed, but has shown extraordinary strength and potential.
Of course, in addition to these hard-core data, SMIC's strategic vision should not be underestimated. They are not only working in the domestic market, but also actively expanding into the international market, especially in the United States and Eurasia.
Although the proportion of revenue in the international market is relatively small, this global layout is very important to enhance the international competitiveness of enterprises.
And what makes SMIC different from other competitors, such as UMC and GF, may be curious? In fact, from corporate culture to management model, SMIC has taken a different path.
They pay more attention to independent innovation of technology, and are more inclined to seek long-term and stable cooperative relations in the market, rather than simple price competition. This strategy allows them to sail more steadily in the face of market volatility.
But success doesn't happen by accident. SMIC's rise is also inseparable from the support of national policies and the optimization of the market environment.
In recent years, with the restructuring of the global supply chain, China's semiconductor industry has ushered in unprecedented development opportunities. The government's emphasis and investment in the semiconductor industry has provided fertile ground for companies such as SMIC.
At the same time, we cannot ignore the fact that the demand in the global semiconductor market continues to grow. From smartphones to electric vehicles, from data centers to the Internet of Things, almost all modern technology products are inseparable from chips. Such a market environment provides SMIC with a broad space for development.
Of course, the growth of any business cannot be smooth sailing. In the face of strong competitors such as TSMC and the ever-changing international political and economic environment, SMIC's future path remains full of challenges.
They need to continue to work hard in technological innovation, market expansion, quality improvement, etc., in order to maintain a competitive advantage.
Finally, SMIC's story tells us a truth: in today's globalized world, the rise of any enterprise is not isolated.
It requires the support of the state, the demand of the market, the efforts of enterprises and the synergy of the global supply chain. Only in this way can we overcome obstacles and succeed in international competition.
epilogue
It is no coincidence that SMIC has become the world's second-largest foundry. It is the result of the joint promotion of the troika of technological progress, market layout and capacity improvement.
At the same time, SMIC's success is a microcosm of the overall progress of China's semiconductor industry. SMIC still has a long way to go in the future, but they have proven their strength and potential, and we have reason to expect them to perform even better in the future!