Semiconductor Manufacturing International (FRA:MKN2) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Semiconductor Manufacturing International Operating Margin % Related Terms
Semiconductor Manufacturing International Operating 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 Operating Margin % Chart
Semiconductor Manufacturing International Annual Data
FRA:MKN2 vs NVDA, AVGO, MU: Operating Margin % Comparison
For the Semiconductors subindustry, Semiconductor Manufacturing International's Operating Margin %, along with its competitors' market caps and Operating 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 Operating Margin % vs Semiconductors Industry
Semiconductor Manufacturing International Operating Margin % Calculation
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
* 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 (FRA:MKN2) has a Operating Margin % of 9.88% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Semiconductor Manufacturing International and its competitors. This is 43% above median its historical median of 6.92. According to the industry distribution chart, Semiconductor Manufacturing International ranks #380 out of 1023 companies in the Semiconductors industry, placing it in the top 37.1%.
Is Semiconductor Manufacturing International's Operating Margin % too high?
Semiconductor Manufacturing International's current Operating Margin % of 9.88% is 43% above median its 10-year median of 6.92. The Semiconductors industry median Operating Margin % is 5.24. Semiconductor Manufacturing International's value of 9.88% is 88.5% above this industry median. Based on the distribution chart, Semiconductor Manufacturing International ranks #380 out of 1023 companies in the Semiconductors industry, which is above the industry midpoint. Overall, Semiconductor Manufacturing International has a GF Score™ of 77/100, reflecting its overall financial health beyond just this single metric.
How does Semiconductor Manufacturing International's Operating Margin % compare to NVDA and AVGO?
According to the Semiconductors industry distribution chart, Semiconductor Manufacturing International ranks #380 out of 1023 companies for Operating Margin %. This puts Semiconductor Manufacturing International in the upper half of its industry. The industry median Operating Margin % is 5.24. Semiconductor Manufacturing International's value of 9.88% is 88.5% above this benchmark. While the company's 10-year median is 6.92 vs. the industry median of 5.24, Semiconductor Manufacturing International has consistently been above 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 Operating Margin % for a Semiconductors company?
The median Operating Margin % among Semiconductors companies is 5.24, based on 1,023 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Semiconductor Manufacturing International's current Operating Margin % of 9.88% is 88.5% above 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 Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Semiconductor Manufacturing International and its competitors. For the Semiconductors industry, the median Operating Margin % is 5.24 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Semiconductor Manufacturing International's current Operating Margin % is 9.88%, which is 43% above median its own 10-year median of 6.92. 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?
Semiconductor Manufacturing International (FRA:MKN2) has a current Operating Margin % of 9.88%. The stock's GF Value™ is €1.57, compared to a current price of €3.40 — trading 116.6% above its estimated fair value. The current Operating Margin % is 9.88%, which is 43% above median its 10-year median of 6.92 and 88.5% above the Semiconductors industry median of 5.24. 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 Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Semiconductor Manufacturing International (FRA:MKN2), the current Operating Margin % is 9.88% 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 (FRA:MKN2) Overvalued in 2026?
Based on GuruFocus' analysis, Semiconductor Manufacturing International stock appears to be overvalued.
The current stock price of €3.40 is trading 116.6% above its estimated GF Value™ of €1.57.
Key valuation signals for FRA:MKN2:
Operating Margin %: 9.88% (43% above median its 10-year median of 6.92)
GF Value™: €1.57 vs. price of €3.40 (116.6% above fair value)
Industry Position: 88.5% above the Semiconductors median (#380 of 1023)
No single metric tells the full story. See the FRA:MKN2 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
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