SMIC saw sales surge in the past two years, as global demand for chips rocketed in the wake of the pandemic and the global chip shortage.
Photo from CFP
By PENG Xin
Chinese chip foundry Semiconductor Manufacturing International Corporation (SMIC) said on Thursday that its profit in Q4 last year fell 20 percent to 2.7 billion yuan (US$400 million) in a bleak electronics market.
"In 2022, the market demand for smartphones, computers, and home appliances turned from strong to weak, and customers' willingness to place orders was significantly weakened," said SMIC co-CEO ZHAO Haijun in an earnings call.
SMIC has seen sales surge over the past two years, as global demand for low-end chips rocketed in the wake of the pandemic and a global chip shortage.
SMIC is a partially state-owned publicly listed Chinese semiconductor foundry and the largest contract chip maker in the Chinese mainland. It is one of the leading foundries in the world and the front-runner in capability, scale, and service in China.
SMIC revenue last year reached US$7.2 billion (48.8 billion yuan), up 33.6 from 2021, with gross margin at a record high of 38 percent. Its revenue in Q4 reached US$1.6 billion, down 15 percent from the previous quarter, but up 2.6 percent from a year earlier.
Despite record-high sales last year, SMIC warned of a weak 2023. In its financial filing, SMIC said it expects revenue for 2023 to "decline by low-teens percentage year-over-year," which would mark a break from continual growth. With gross margin down to 20 percent, revenue could fall by as much as 12 percent.
SMIC manages three 8-inch wafer fabs and four 12-inch fabs in Shanghai, Beijing, Tianjin and Shenzhen. A further three 12-inch fabs are under construction. The company is regarded as China's best hope of becoming a global leader in chip manufacturing to rival Taiwan Semiconductor Manufacturing Corporation (TSMC), the industry's largest player.
The company remains a long way behind rivals in leading-edge technology and has been in Washington's crosshairs amid the ongoing dispute with Beijing over chip technology.
SMIC has offices in Europe, Hong Kong, Japan, and Taiwan.
