CHINA-ECONOMY: REVENUES AND PROFITS OF CHINA'S LARGEST CHIP MANUFACTURER DECLINE
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Chinese chipmaking champion Semiconductor Manufacturing International Corp. reported declining revenue and profits during the final quarter of 2020, and its shares slid as much as 10% on February 5, after the company warned that U.S. sanctions were crimping its ability to buy equipment so it could expand to meet customer demand. Fourth-quarter revenue dropped 9.4% to $981 million from $1.08 billion in the third quarter, even as sales showed a year-over-year rebound of 16.9%. Profits fell 13.2% during the fourth quarter from the prior quarter to $228.6 million, overshadowing a tripling of profits from the fourth quarter a year earlier. Gross margins fell to 18% during this year’s fourth quarter, and the company warned that during the current first quarter these profit levels — closely watched by investors — would remain stuck in the range of 17% to 19%.
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