Semiconductor Manufacturing International (981) Q1 2026 earnings summary

Executive summary

• First quarter 2026 revenue reached $2,505.5 million, up 0.7% sequentially and 11.5% year-over-year, with gross margin at 20.1% and net profit attributable to owners at $197.4 million.

• EBITDA was $1,435.2 million (57.3% margin), and profit from operations was $248 million.

• Wafer revenue made up 93.9% of total revenue, with a 2.3% sequential increase in amount, driven by higher blended wafer prices despite a slight decrease in shipment units.

• Revenue by region: China 88.9%, America 9%, Eurasia 2%; China revenue rose 2% sequentially.

• Management expressed increased optimism for the year, citing strong AI-driven demand, robust order backlog, and prioritization of capacity expansion and R&D over dividends.

Financial highlights

• Total assets at quarter-end were $55 billion, with $13.9 billion in cash and $13.2 billion in liabilities; total debt was $14.5 billion.

• Net cash from operating activities was $685 million; net cash from financing activities was $2,365 million; capital expenditure for 1Q26 was $1,563 million.

• Gross profit was $503.6 million, up 5.3% sequentially but down 0.4% year-over-year.

• Research & development expenses decreased 21.9% sequentially to $187.1 million; general & administrative expenses fell 18.9% to $118.2 million.

• Cash and cash equivalents increased to $7.28 billion from $5.87 billion at year-end.

Outlook and guidance

• Second quarter 2026 revenue is expected to increase by 14%-16% sequentially, with gross margin projected at 20%-22%.

• Shipment units and blended ASP are both expected to improve, driven by price increases and strong order book.

• Management will monitor demand, allocate resources flexibly, and accelerate product response.

• 1Q26 results exceeded guidance, with revenue up 0.7% sequentially (vs. flat guidance) and gross margin at 20.1% (vs. 18%-20% guidance).

• Management is more optimistic about full-year business performance due to robust AI-driven demand and localization trends.