SMIC Q4 2025 Earnings: ¥1.22 Billion ($169 Million USD) Profit Shows Chinese Chip Giant’s Recovery Momentum

• Supply Chain Localization: Increasing domestic demand for Chinese-made chips due to geopolitical restrictions.
• Operational Efficiency: Profit growth (23.2%) significantly outperforming revenue growth (11.9%).
• Market Positioning: Status as the primary domestic alternative to TSMC and Samsung for Chinese firms.
• Sector Recovery: Capitalizing on the broader semiconductor industry rebound following the 2024 downturn.

China’s semiconductor manufacturing landscape just got a boost.

Semiconductor Manufacturing International Corporation (Zhongxin Guoji 中芯国际), commonly known as SMIC, dropped its Q4 2025 financial results on February 10, and the numbers tell an interesting story about where China’s chip industry is heading.

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The Numbers: SMIC’s Q4 Performance Breakdown

Let’s get straight to what matters:

• Total operating revenue: ¥17.81 billion RMB ($2.47 billion USD)
• Year-over-year growth: 11.9% increase
• Net profit attributable to shareholders: ¥1.22 billion RMB ($169 million USD)
• Profit growth rate: 23.2% year-on-year — that’s where things get spicy
• Earnings per share: ¥0.15 RMB ($0.02 USD)

Here’s what’s happening:

Revenue jumped 11.9%, but profit jumped 23.2%.

That’s not random.

This gap between revenue growth and profit growth suggests that SMIC is doing something right operationally — better cost management, improved efficiency, or both.

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Why This Matters for the Chinese Chip Ecosystem

SMIC isn’t just another semiconductor manufacturer.

It’s the largest pure-play chip foundry in mainland China.

When SMIC performs well, it signals momentum in China’s push for supply chain localization — a strategic priority that’s become increasingly critical given geopolitical tensions and Western restrictions on advanced chip exports.

Think about it:

• Chinese companies need domestic chip manufacturing capacity
• They can’t rely solely on TSMC (Taiwan Semiconductor Manufacturing Company) or Samsung anymore
• That’s where SMIC fills the gap

These earnings suggest the strategy is working, at least for now.

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Q1 2026 Guidance: What SMIC Expects Next

SMIC isn’t just looking backward — they gave forward guidance for Q1 2026, and it’s worth paying attention to.

Expected Performance Metrics

• Sales revenue: Expected to remain flat compared to Q4 2025
• Gross margin: Projected between 18% and 20%

The flat revenue guidance is interesting.

It’s not bullish, but it’s not bearish either — it’s cautious.

SMIC is acknowledging two competing forces:

1. Tailwinds: Opportunities from supply chain localization efforts
2. Headwinds: Challenges tied to broader memory chip cycles

Translation: There’s growth potential, but the market environment is uncertain.

Full-Year 2026 Outlook

Looking further ahead, SMIC shared some broader context for the full year 2026:

• Revenue growth expectations: Management expects sales revenue growth to exceed the average of comparable industry peers
• Capital expenditure: Expected to remain roughly flat compared to 2025 levels

Here’s the strategic implication:

SMIC is saying it will grow faster than competitors while maintaining disciplined spending.

That’s a confident message without being overly aggressive — especially important given the uncertain macroeconomic environment.

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The Context: Where SMIC Fits in the Global Chip Race

SMIC’s strong Q4 performance doesn’t exist in a vacuum.

The semiconductor industry has been recovering from 2024’s downturn, and Chinese chipmakers are positioning themselves strategically within that recovery.

Key things to understand:

• Supply chain diversification: After COVID-era supply chain disasters, companies want backup suppliers. SMIC benefits from this.
• Geopolitical dynamics: U.S. restrictions on chip exports to China create structural demand for domestic alternatives.
• Memory chip cycles: The DRAM and NAND markets are notoriously cyclical. SMIC navigating this well is a good sign.

The real question for investors and founders to watch:

Can SMIC maintain this momentum while competing with well-funded international rivals and dealing with ongoing U.S. export restrictions?

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What This Means for Tech Investors and Founders

If you’re tracking Chinese semiconductor trends, SMIC’s earnings matter.

The company’s 23.2% profit growth signals that operational improvements are real, not just accounting tricks.

The conservative Q1 guidance shows management isn’t getting ahead of themselves.

And the full-year outlook positioning SMIC to outpace peers is a statement of confidence in the supply chain localization thesis.

For founders building in the chip ecosystem, this means:

• SMIC is likely to remain a key partner for domestic chip manufacturing
• The company has resources to invest in relationships and capacity
• China’s chip independence strategy has real corporate backing

For investors, the earnings validate the thesis that Chinese semiconductor companies are moving up the value chain, even under pressure.

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References

• SMIC Performance Report: Q4 2025 Net Profit Reaches 1.22 Billion Yuan – Jiemian News (Jiemian Xinwen 界面新闻)
• Investor Relations – SMIC (Zhongxin Guoji 中芯国际)
• SMIC Q4 Net Profit of 1.22 Billion Yuan – East Money Information (Dongfang Caifu 东方财富)
• SMIC (981:HK) Stock Profile and News – Bloomberg