(Yicai Global) March 29 -- China's Semiconductor Manufacturing International, the world's fifth-largest maker of integrated circuits, slowed profit growth in 2022 despite increasing sales amid sluggish growth in the global integrated circuit industry.

SMIC's annual revenue rose 39 percent to CNY49.5 billion (USD7.2 billion) from a year ago, much higher than the 2021 clip of 30 percent, the Shanghai-based company said in its earnings report yesterday. Net profit climbed 13 percent to CNY12.1 billion, after more than doubling in 2021.

Domestic rival TSMC boosted its market share to 60 percent to rank first as the world's biggest manufacturer of semiconductors as of the fourth quarter of last year, while SMIC was No. 5 with a market share of 5 percent, down from 6 percent in late 2021, per statistics from Counterpoint Research.

SMIC increased its gross profit margin by 9 percentage points to 38.3 percent but its net profit margin dropped by 1.8 points to 29.6 percent in 2022, partly due to rising expenditures on opening new factories. SMIC's administration expenses surged by 85 percent to CNY3 billion (USD435.6 million) in 2022.

This year is not likely to be much better as the firm predicted last month that the IC industry will remain at the bottom of the industry cycle in the first half of this year, so SMIC’s revenue will drop by 10 to 12 percent in the first quarter from the previous quarter. Its gross margin will range from 19 to 21 percent over the three months, and for the full year, it will remain at around 20 percent.

The IC market was growing slower last year and that showed in the chipmaker's inventory. The balance of inventory totaled CNY13.3 billion as of Dec. 31, 2022, up 75 percent from early 2022, according to the earnings report. That of wafers amounted to more than 516,720 pieces, up almost five times.

SMIC's Shanghai-listed shares [SHA: 688981] climbed 1.9 percent to CNY50.01 (USD7.30) as of 1.29 p.m. while its Hong Kong-listed equity [HKG: 0981] rose 2.3 percent to HKD18.08 (USD2.30).

Editor: Emmi Laine, Xiao Yi