Hua Hong Semi posts 22.2% revenue rise in Q1 2026; shareholder profit up 458% with Q2 revenue guided higher

Hua Hong Semi reported first-quarter 2026 revenue of USD 660.93 million, a 22.2% year-on-year increase and broadly flat sequentially. Gross margin reached 13.0%, expanding 3.8 percentage points from the prior-year period and unchanged from Q4 2025.

Net profit attributable to shareholders jumped to USD 20.93 million, up 458.1% year-on-year and 19.9% quarter-on-quarter, driving basic earnings per share to USD 0.012. At the consolidated level, the company recorded a net loss of USD 17.27 million, narrowed by 66.9% year-on-year, reflecting a larger share of losses allocated to non-controlling interests.

Operational momentum remained solid. Wafer shipments rose 18.0% year-on-year to 1.45 million 8-inch equivalent units, with overall capacity utilisation at 99.7%. Twelve-inch wafers accounted for 62.7% of total revenue, up from 57.3% a year earlier, as new Wuxi lines ramped. Revenue growth was led by embedded NVM (+41.7%), standalone NVM (+33.2%) and analog & power management (+25.8%). Geographically, China contributed 79.5% of sales, while North America revenue expanded 51.9%.

Operating expenses increased 8.8% year-on-year to USD 105.61 million amid higher costs for the Wuxi expansion, though they fell 18.9% versus Q4 2025 following lower labour expenses. Other net loss narrowed to USD 2.45 million, helped by foreign-exchange gains that offset reduced government subsidies and higher finance costs.

Cash flow from operations more than doubled year-on-year to USD 130.43 million. Capital expenditure reached USD 924.87 million—USD 886.15 million for 12-inch capacity and USD 38.73 million for 8-inch lines—driving net investing cash outflows to USD 856.99 million. Financing inflows of USD 638.66 million, mainly from new bank borrowings, kept period-end cash and cash equivalents at USD 4.87 billion. The debt ratio stood at 37.9% with a current ratio of 3.4 times.

For Q2 2026, management expects revenue between USD 690 million and USD 700 million and targets a gross margin of 14–16%. The proposed acquisition of Huali Micro has entered substantive review at the Shanghai Stock Exchange and is anticipated to close in the second half of 2026.