SMIC has been hit with U.S. sanctions but its business has continued to grow. However, China's biggest chipmaker still faces a challenge catching up with rivals such as TSMC.
China's biggest semiconductor manufacturing firm SMIC on Friday posted its first decline in quarterly revenue in more than three years as a glut in chips and lack of demand continues to hit the industry.
SMIC or Semiconductor Manufacturing International Co., posted revenue of $1.46 billion in the first quarter of the year, down 20.6% year-on-year. The last time the company saw a sales decline was in the third quarter of 2019.
Net profit fell to $231.1 million, down 48% year-on-year.
SMIC Is China's most important chipmaking company and seen as a key hope to Beijing's ambitions to boost its domestic semiconductor industry and catch up with rivals like Taiwan's TSMC and South Korea's Samsung.
However, the company's technology is still years behind those leading companies. In 2020, SMIC was put on a U.S. trade blacklist called the Entity List. And last year, Washington introduced sweeping export restrictions aimed at cutting China off from advanced chip tech and equipment. Indeed, these curbs have cut SMIC off from the key tools required to make more advanced chips.
But the latest business slump comes amid a difficult chip market with a glut of supply and lack of demand that has hit companies across the industry. Over 50% of SMIC's revenue comes from making chips that go into smartphones and other consumer electronics. Both smartphone and PC shipments declined in the first quarter.
However, SMIC forecast its second-quarter revenue to recover and rise between 5% and 7% quarter-on-quarter. Many other chipmakers have forecast a recovery in the second half of the year.
"For 2Q, it also guided its sales to recover earlier than its peers," Sze Ho Ng, analyst at investment bank China Renaissance, toldCNBC. "The domestic market recovery is happening earlier than overseas," Ng said.
It is the largest contract chip maker in mainland China. SMIC is headquartered in Shanghai and incorporated in the Cayman Islands. It has wafer fabrication sites throughout mainland China, offices in the United States, Italy, Japan, and Taiwan, and a representative office in Hong Kong.
https://en.wikipedia.org › wiki › Semiconductor_Manufacturi...
The semiconductor industry is the aggregate of companies engaged in the design and fabrication of semiconductors and semiconductor devices, such as transistors and integrated circuits. It formed around 1960, once the fabrication of semiconductor devices became a viable business.
https://en.wikipedia.org › wiki › Semiconductor_industry
International Co., posted revenue of $1.46 billion in the first quarter of the year, down 20.6% year-on-year. The last time the company saw a sales decline was in the third quarter of 2019. Net profit fell to $231.1 million, down 48% year-on-year.
A logo hangs on the building of the Beijing branch of Semiconductor Manufacturing International Corporation (SMIC) on December 4, 2020 in Beijing, China. China's largest chipmaker SMIC is now the world's third-largest foundry in terms of revenue in the first quarter, according to Counterpoint Research.
China is currently the world's top semiconductor consumer, accounting for more than 50% of global consumption, according to the Centre for International Governance Innovation. Along with this, it is also the world's fifth largest semiconductor manufacturer, following Taiwan, South Korea, Japan and the US.
According to a report from global media outlet Wccftech, China's largest foundry, SMIC, is rumored to produce 5-nanometer chips for Huawei this year, without the need for extreme ultraviolet (EUV) lithography machines manufactured by Dutch company ASML.
Which company currently leads the global semiconductor chip manufacturing market? As of 2023, Taiwan Semiconductor Manufacturing Company (TSMC) is the world's largest semiconductor chip manufacturer with a market share of over 50%. TSMC is followed by Samsung Electronics and Intel Corporation.
LOS ANGELES -- The U.S. is set to more than triple its semiconductor manufacturing capacity and control almost 30% of advanced chipmaking by 2032, thanks in no small part to the CHIPS Act.
United States New Export Controls on Advanced Computing and Semiconductors to China. Effective October 7, 2022, the United States of America implemented new export controls targeting the People's Republic of China's (PRC) ability to access and develop advanced computing and semiconductor manufacturing items.
China was the United States' third-largest trade partner in 2021. In 2021, 8.6% of total U.S. exports of $1.8 trillion to the World were exported to China and 17.9%of total U.S. imports of $2.8 trillion were imported from China.
The first is that it's more expensive to produce the semiconductors than if more advanced tools and machinery were used. The second is an issue around yield — the number of usable chips that are produced and can be sold to customers. With older equipment, the yield is also lower.
In theory, China could be self-sufficient in some of these older, cheaper semiconductors. But again, it does not have a technology lead. Countries can impose anti-subsidy duties on these products, which could prevent China from becoming as dominant in these semiconductors as in other supply chains.
Export controls imposed by countries like the United States restrict China's access to cutting-edge microchip technology. These controls aim to protect national security interests and prevent the transfer of sensitive technology to China, affecting its semiconductor development.
It's worth mentioning that EUV lithography tool supplier ASML expects to reach 1-nm process technology in 2028. On TSMC's part, it has opened a research and development center in Hsinchu, Taiwan, where 7,000 researchers are working on novel materials and transistor structures for 1-nm chips.
Semiconductor Manufacturing International Corporation (SMIC) is a partially state-owned publicly listed Chinese pure-play semiconductor foundry company. It is the largest contract chip maker in mainland China.
China is 'doubling down' on local chip development with a new $47.5 billion fund: 'The size of the fundraising speaks for itself' A general view of Semiconductor Manufacturing International Corporation (SMIC) facilities in Shanghai. China's Big Fund has supported companies like SMIC to boost its growth.
Sometimes called the most important company in the world, TSMC (officially Taiwan Semiconductor Manufacturing Company) produces an estimated 90% of the world's super-advanced semiconductor chips, which are used to power everything from smartphones to artificial intelligence applications.
Taiwan produces approximately 50 % of the world's semiconductors, while South Korea hosts a vast network of over 20,000 semiconductor-related companies, with Samsung leading as the largest producer by revenue, holding a 17 % share of the global foundry market.
Leading with a 68% market share, Taiwan remains a global force in the semiconductor industry. Leading with a 68% market share in the industry, Taiwan is home to a majority of the world's most advanced semiconductor chips. China—approximately 1,300 miles away—wants in.
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