Revenue in 2017 recorded a record high of US$3,101.2 million, compared with US$2,914.2 million in 2016, an increase of 6.4%.
Gross profit for the year of 2017 was US$740.7 million, which was US$849.7 million compared to 2016.
The gross profit margin for 2017 was 23.9%, which was 29.2% compared to 2016.
In 2017, revenue growth from 28nm recorded a record high of 8.0% of total wafer revenue, compared with a revenue increase of 4.4 times in 2016.
Net cash generated from operating activities in 2017 recorded a record high of US$1,080.7 million, compared with US$977.2 million in 2016, representing an increase of 10.6%.
The net debt-to-equity ratio remained low at 11.8% as of December 31, 2017.
Letter to shareholders
Dear shareholders,
In the past 2017, the company recorded a total revenue of approximately US$3.1 billion, an increase of 6.4% year-on-year; recorded a profit before tax depreciation and amortization of nearly US$1.12 billion, a year-on-year increase of approximately 5.2%. New high. Due to the weak smartphone market and process migration of some products, the growth trend has slowed down from the previous year. At the same time, the increase in depreciation expense due to the expansion of new production capacity and the increase in our R&D investment also contributed to earnings growth. This brought pressure. The revenue from the United States District grew by 44.5% year-on-year in 2017, while the revenue in China Region was flat compared to 2016. The expansion of production at 28nm is our main growth driver for 2017. One of them, the proportion of revenue from 28nm rose rapidly from 5% at the beginning of the year to 11.3% at the end of the year, an increase of 443% over the same period last year.
In the past year, the management of the company has also undergone some changes. Dr. Qiu Ciyun decided to step down from the post of CEO for personal family reasons. The Board of Directors successively appointed Dr. Zhao Haijun and Dr. Liangmen Song as the joint CEO and executive director of SMIC. It is believed that Dr. Zhao Haijun and Dr. Liang Mengsong will work together to lead SMIC to a new height and contribute to the development of SMIC. At the same time, we also express our heartfelt thanks to Dr. Qiu for his outstanding contribution to the company. SMIC will continue to maintain its international and independent operations. With the strong support of all management teams, we are confident in the company's future prospects.
On the evening of December 6, 2017, the Company successfully completed a equity portfolio financing transaction in the global capital market. The total raised funds amounted to approximately US$1 billion, reflecting the firm confidence of the capital market in the future development of SMIC. It is the largest technology-related stocks and stock-related products of the Hong Kong market so far. The share issuance is the largest increase in the primary market of technology stocks so far by the Hong Kong Stock Exchange. At the same time, SMIC is also the only company in the Asia-Pacific region for almost five years. The regional issuance without coupons jumps, and there is no interest rate rebalancing for enterprises with perpetual convertible bonds, and the coupon rate of perpetual convertible bonds is the lowest level in the Asia-Pacific region so far. The financing was approved by the main shareholders of SMIC. With strong support, Datang Holdings and National Integrated Circuit Industrial Fund have actively participated in this round of financing, and on the basis of exercising their preferential subscription rights and oversubscribed the current issuance of perpetual convertible bonds, fully embodying the major shareholder Strategic support for company development.
In 2018, we clearly recognized the changes in the market environment of the industry, such as the slowdown in the growth of smart phones. The main driving force for growth in the industry has shifted to high-performance computing products based on advanced processes, and competition in mature processes has become increasingly fierce. The price pressure is much greater than the original expectation. SMIC is currently in a transitional transition period. Challenges and opportunities coexist. We are also pleased to observe that we have made encouraging progress in advanced process R&D, showing that R&D efficiency has been greatly improved. We are not only The growth rate of 28nm HKMG yield has been greatly improved, and even more encouraging progress has been made in 14nm R&D. The device yield rate and other factors have all reached the internal target well. 2018 is a potential one. Years. We will continue to increase R&D investment, accelerate the research and development of advanced processes and key mature process platforms, and make full preparations in technology. We are determined to use our honest and innovative manufacturing and services to dedicate our customers to first-class technologies and products. We will continue to proceed from the best interests of all shareholders, and diligently and cautiously execute our business plan. We would like to The majority of shareholders, customers, suppliers, and employees to express my sincere thanks to the sustained attention and support the development of SMIC given.
Zhou Zixue Chairman and Executive Director
Zhao Haijun, Liang Mengsong Co-CEO and Executive Director