Hua Hong Semiconductor Ltd. ((HK:1347)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Hua Hong Semiconductor’s recent earnings call painted a mixed picture for investors. While the company celebrated record-breaking revenue and improvements in gross margin, it also faced challenges with a net loss for the period, a significant drop in other income, and rising operating expenses. Despite these hurdles, Hua Hong demonstrated strong demand in key markets and continued technological advancements, signaling a resilient outlook.
Record-Breaking Revenue
Hua Hong Semiconductor achieved a remarkable milestone in the third quarter of 2025, with sales revenue reaching a record high of USD 635.2 million. This represents a 20.7% increase over the same quarter in 2024 and a 12.2% rise from the previous quarter, underscoring the company’s robust market performance.
Gross Margin Improvement
The company’s gross margin improved to 13.5%, marking an increase of 1.3 percentage points from Q3 2024 and 2.6 percentage points from Q2 2025. This improvement reflects Hua Hong’s enhanced capacity utilization and an increase in average selling prices.
Strong Demand in China
China remains a key market for Hua Hong, contributing $522.6 million to the total revenue, which accounts for 82.3% of the company’s total revenue. This marks a 20.3% increase compared to Q3 2024, highlighting the robust demand in the region.
Growth in North America and Europe
Hua Hong also experienced significant growth in North America and Europe. Revenue from North America increased by 36.7% compared to Q3 2024, while European revenue saw a 12.6% rise, reflecting the company’s expanding global footprint.
Technological Advancements
The company continues to make strides in process technology, research and development, and market development. These advancements are contributing to improved profitability and laying a solid foundation for long-term sustainable growth.
Net Loss for the Period
Despite the revenue gains, Hua Hong reported a net loss of $7.2 million for the period, a stark contrast to the $22.9 million profit in Q3 2024. However, this is an improvement from the $32.8 million loss in Q2 2025.
Decrease in Other Income
Other income net experienced a significant decrease, falling to $70.8 million, which is 65.7% lower than Q3 2024. This decline was primarily due to reduced foreign exchange gains and interest income.
Increased Operating Expenses
Operating expenses rose to $100.4 million, a 23.3% increase over Q3 2024. The rise was mainly attributed to higher engineered wafer costs and depreciation expenses.
Forward-Looking Guidance
Looking ahead, Hua Hong Semiconductor provided guidance for the fourth quarter, anticipating revenue between $650 million and $660 million, with a projected gross margin ranging from 12% to 14%. The company is focusing on strategic capacity planning initiatives, including technology and capacity expansions, to navigate the evolving semiconductor landscape.
In summary, Hua Hong Semiconductor’s earnings call highlighted both achievements and challenges. While the company celebrated record revenue and gross margin improvements, it also faced a net loss and rising expenses. Nevertheless, strong demand in key markets and technological advancements provide a positive outlook for the future.