59% Q2 profit drop at SMIC

SMIC, currently the world’s No.2 foundry, had Q2 profit which was down 59.1% y-o-y at $164.6 million on revenue up 21.8% at $1.9 billion.It forecast Q3 revenue growth of 13-15%.

Despite a price war in the foundry industry Co-CEO Zhao Haijun said: “SMIC will not take the initiative to cut prices,” in last Friday’s earnings call.

Zhao said the industry was benefiting from trade tensions which were causing Chinese companies to switch to local suppliers.

Q2 capex was $2.25 billion. Opex was $178 million. In Q2 it had cash and cash equivalents of $3.8 billion, down from $5.3 billion in Q1.