2023-08-10 17:49:00
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10.08.2023 20:49, Vladimir Myronenko
China’s largest contract chip manufacturer SMIC informed results of work in the second quarter of 2023. Due to US sanctions restricting SMIC’s access to advanced foreign equipment, as well as a slow recovery in global demand for chips, the company’s revenue fell by 18% compared to the same period in 2022 to $1.56 billion.
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SMIC net income was $402.76 million, which is 21.7% less than the result of the second quarter of 2022, when the profit was $514.33 million. At the same time, SMIC’s revenue in the second quarter increased by 6.7% compared to the previous quarter, which is explained by the relatively high utilization of the company’s 300 mm wafer processing facilities.
The Chinese firm competes in the global market with Taiwan’s TSMC and South Korea’s Samsung, although its chip manufacturing processes are several generations behind those used by leading semiconductor manufacturers. Due to the imposition of US sanctions against SMIC in 2020, the company is limited in its ability to purchase lithography equipment from the Netherlands ASML and other companies, which is why it cannot establish chip production using advanced manufacturing processes and close the gap with competitors.
The Chinese company expects a further increase in shipments in the third quarter of 2023. “It is expected that the revenue in III quarter will grow by 3ؘ-5% sequentially, and gross profit is expected in the range of 18-20%”, SMIC said on Thursday. The company also forecasts that its revenue in the second half of 2023 will be “better than the first half”having set itself the task of developing its own scientific and technical developments, “Verify new products quickly, set up support facilities as soon as possible, and fully prepare for the next phase of the growth cycle.”
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