Semiconductor Manufacturing International (SMIC) expects to post a revenue decline of 16-18% sequentially in the first quarter of 2019, with gross margin ranging from 20% to 22%.

Revenues for the first quarter are regarded as "the trough of this year," said China-based pure-play foundry in a statement.

SMIC reported revenues fell 7.4% sequentially to US$788 million in the fourth quarter of 2018, with gross margin reaching 17% compared with 20.5% in the prior quarter. Profits attributable to the company were US$27 million in the fourth quarter, with earnings per ADS coming to US$0.02.

SMIC saw its revenues climb to a record high of US$3.36 billion in 2018, when gross margin slid to 22.2% from 23.9% in 2017. Profits attributable to the company came to US$134 million, compared with US$180 million a year earlier.

"2018 annual revenue grew 8.3%, which was the fourth consecutive year of growth," SMIC indicated.

"The 2019 macro environment has a lot of uncertainties," SMIC continued. "We are actively seeking growth opportunities through steady progress in expanding our customer base, enriching mature and specialty technology product mix and applications, and exploring value added opportunities."

In addition, SMIC disclosed the progress made in its FinFET process technology development. "We are working hard to establish advanced technology total solutions, with particular focus on the fundamentals of FinFET technology, platform development, and customer engagement," said SMIC co-CEO Liang Mong Song.

"At present, SMIC's first generation of 14nm FinFET technology has already entered customer product verification; product reliability and yields have readily improved," Liang noted. "Meanwhile, 12nm process development achieved breakthrough."

SMIC has set aside a capex of US$2.1 billion for its foundry operations this year, and plans to spend mainly on equipment and facilities for its majority-owned 12-inch wafer fab in Shanghai and FinFET R&D line.