Semiconductor Manufacturing International (SHSE:688981) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Semiconductor Manufacturing International had a gross margin of 20.10% for the quarter that ended in Mar. 2026 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Semiconductor Manufacturing International Gross Margin % Related Terms
Semiconductor Manufacturing International Gross Margin % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Semiconductor Manufacturing International Gross Margin % Chart
Semiconductor Manufacturing International Annual Data
SHSE:688981 vs NVDA, AVGO, MU: Gross Margin % Comparison
For the Semiconductors subindustry, Semiconductor Manufacturing International's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Semiconductor Manufacturing International Gross Margin % vs Semiconductors Industry
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Semiconductor Manufacturing International (SHSE:688981) has a Gross Margin % of 20.10% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Semiconductor Manufacturing International and its competitors. This is 12% below median its historical median of 22.90. Over the past decade, Semiconductor Manufacturing International's Gross Margin % has ranged from 18.03 to 37.97. According to the industry distribution chart, Semiconductor Manufacturing International ranks #682 out of 1011 companies in the Semiconductors industry, placing it in the top 67.5%.
Is Semiconductor Manufacturing International's Gross Margin % too high?
Semiconductor Manufacturing International's current Gross Margin % of 20.10% is 12% below median its 10-year median of 22.90. Over the past 10 years, this metric has ranged from a low of 18.03 to a high of 37.97. The Semiconductors industry median Gross Margin % is 29.61. Semiconductor Manufacturing International's value of 20.10% is 32.1% below this industry median. Based on the distribution chart, Semiconductor Manufacturing International ranks #682 out of 1011 companies in the Semiconductors industry, which is below the industry midpoint. Overall, Semiconductor Manufacturing International has a GF Score™ of 77/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Semiconductor Manufacturing International's Gross Margin % compare to NVDA and AVGO?
According to the Semiconductors industry distribution chart, Semiconductor Manufacturing International ranks #682 out of 1011 companies for Gross Margin %. This places Semiconductor Manufacturing International in the lower half of its industry. The industry median Gross Margin % is 29.61. Semiconductor Manufacturing International's value of 20.10% is 32.1% below this benchmark. Historically, Semiconductor Manufacturing International's own Gross Margin % has ranged from 18.03 to 37.97 over the past decade. While the company's 10-year median is 22.90 vs. the industry median of 29.61, Semiconductor Manufacturing International has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Semiconductors company?
The median Gross Margin % among Semiconductors companies is 29.61, based on 1,011 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Semiconductor Manufacturing International's current Gross Margin % of 20.10% is 32.1% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Semiconductor Manufacturing International and its competitors. For the Semiconductors industry, the median Gross Margin % is 29.61 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Semiconductor Manufacturing International's current Gross Margin % is 20.10%, which is 12% below median its own 10-year median of 22.90. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Semiconductor Manufacturing International stock overvalued right now?
Based on GuruFocus' analysis, Semiconductor Manufacturing International (SHSE:688981) is currently considered Significantly Overvalued. The stock's GF Value™ is ¥70.03, compared to a current price of ¥148.76 — trading 112.4% above its estimated fair value. The current Gross Margin % is 20.10%, which is 12% below median its 10-year median of 22.90 and 32.1% below the Semiconductors industry median of 29.61. Semiconductor Manufacturing International's overall GF Score™ is 77/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Semiconductor Manufacturing International (SHSE:688981), the current Gross Margin % is 20.10% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Semiconductor Manufacturing International (SHSE:688981) Overvalued in 2026?
Based on GuruFocus' analysis, Semiconductor Manufacturing International stock appears to be overvalued.
The current stock price of ¥148.76 is trading 112.4% above its estimated GF Value™ of ¥70.03.
GuruFocus considers Semiconductor Manufacturing International to be Significantly Overvalued.
Key valuation signals for SHSE:688981:
Gross Margin %: 20.10% (12% below median its 10-year median of 22.90)
GF Value™: ¥70.03 vs. price of ¥148.76 (112.4% above fair value)
Industry Position: 32.1% below the Semiconductors median (#682 of 1011)
No single metric tells the full story. See the SHSE:688981 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Semiconductor Manufacturing International Business Description
Founded in 2000, Semiconductor Manufacturing International Corporation is the largest foundry in China and the third-largest globally after TSMC and Samsung Electronics, overtaking GlobalFoundries and United Microelectronics in 2024. The company's headquarters and foundry are in Shanghai, with additional foundries in Beijing, Tianjin, and Shenzhen, and offices in the United States, Europe, Japan, Taiwan, and Hong Kong. Its products are used in artificial intelligence, data centers, automotive, consumer electronics, memory, and "Internet of Things" products. SMIC employs 19,952 people as of Dec. 31, 2025.
77GF Score
Get the complete analysis for SHSE:688981
Gross Margin % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
SHSE:688981 has been successfully added to your 
