Technology / Semiconductor / Internet Research

Nicolas Baratte

Nicolas Baratte has been a financial analyst since 2000, covering the Semiconductor sector and Global Technology. Nicolas has worked on the sell-side for JPMorgan, CLSA. On the buy-side for a Tiger fund and Prudential. Nicolas has covered semiconductors, Asian hardware and components, and the Global Tech supply chain. Nicolas lives mostly in Taiwan, sometimes in France and is in New York regularly.

Equity Bottom-Up

Semiconductor Manufacturing International Corp (SMIC) / Equity Bottom-Up

Semiconductor Manufacturing International Corp (SMIC) (981 HK)

Semiconductor Manufacturing International Corp (SMIC)

<ul>
<li>1H25 strong revenue growth continues as capacity increase, “production shifting back domestically”, but weakening ASP and clearly demand pull-in in 1H due to US tariffs and China domestic consumer subsidies.</li>
<li>“2H not clear, especially after late 3Q”. Management mentions the usual macro / US tariffs unknowns. 2025 Capex similar to 2024 (US$7.7bn, 80% revenue), D&amp;A increasing, ASP down, margins muted.</li>
<li>The stock is as expensive as always. 49x 2025 EPS, 41x 2026. Consensus is not expecting a negative tariffs shock or weaker China domestic demand.</li>
</ul>


1H25 strong revenue growth continues as capacity increase, “production shifting back domestically”, but weakening ASP and clearly demand pull-in in 1H due to US tariffs and China domestic consumer subsidies.
“2H not clear, especially after late 3Q”. Management mentions the usual macro / US tariffs unknowns. 2025 Capex similar to 2024 (US$7.7bn, 80% revenue), D&amp;A increasing, ASP down, margins muted.
The stock is as expensive as always. 49x 2025 EPS, 41x 2026. Consensus is not expecting a negative tariffs shock or weaker China domestic demand.


SMIC 1Q25 Strong Wafer Growth but Weak ASP. Same in 2Q. Large Capex to Continue in 2025.