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SMIC raises profit outlook of recovering microchip market
By Zhu Shenshen |
July 23, 2012, Monday
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Online Edition
Online Edition
SEMICONDUCTOR Manufacturing International Corp (SMIC) raised its second-quarter revenue and profit margin expectation, thanks to the recovering global chip market, the Chinese mainland's biggest made-to-order chip maker said yesterday.
The chips made by firms like SMIC are widely used in computer, tablet, phone, auto and home appliance devices.
Shanghai-based SMIC expected revenue in the second quarter to rise 25 to 26 percent from the first quarter, up from the 19 to 21 percent growth in the company guidance in May. The profit margin was expected to hit 23 to 24 percent in the period, above the 19 to 22 percent originally forecast.
"Demand from our clients have surpassed our previous expectation," said SMIC's chief financial officer Gareth Kung in a statement yesterday. "We expect to see continued growth into the third quarter."
The growth of SMIC, the world's fourth biggest made-to-order chip plant, is related to the recovering global chip demand, analysts said.
The global chip market has started to recover from the second quarter and the global market revenue will grow four percent year-on-year to hit US$316 billion in 2012, compared with a previous growth forecast of 2.2 percent, according to Gartner Inc, a US-based IT research firm.
The growing demand comes from memory chips and other chips for tablet computers and mobile phones, industry insiders said.
For example, global mobile phone production will grow 6.7 percent this year, which is expected to contribute to total revenues of US$57.2 billion for semiconductor firms, according to Gartner.
Phone innovation also fuels demand for chips, which are used in interaction (such as retina and gesture sensors), process, display and connection.
The chips made by firms like SMIC are widely used in computer, tablet, phone, auto and home appliance devices.
Shanghai-based SMIC expected revenue in the second quarter to rise 25 to 26 percent from the first quarter, up from the 19 to 21 percent growth in the company guidance in May. The profit margin was expected to hit 23 to 24 percent in the period, above the 19 to 22 percent originally forecast.
"Demand from our clients have surpassed our previous expectation," said SMIC's chief financial officer Gareth Kung in a statement yesterday. "We expect to see continued growth into the third quarter."
The growth of SMIC, the world's fourth biggest made-to-order chip plant, is related to the recovering global chip demand, analysts said.
The global chip market has started to recover from the second quarter and the global market revenue will grow four percent year-on-year to hit US$316 billion in 2012, compared with a previous growth forecast of 2.2 percent, according to Gartner Inc, a US-based IT research firm.
The growing demand comes from memory chips and other chips for tablet computers and mobile phones, industry insiders said.
For example, global mobile phone production will grow 6.7 percent this year, which is expected to contribute to total revenues of US$57.2 billion for semiconductor firms, according to Gartner.
Phone innovation also fuels demand for chips, which are used in interaction (such as retina and gesture sensors), process, display and connection.
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