Tech war: China’s SMIC reports strong revenue growth as geopolitical tensions spur local demand
- SMIC boasted a monthly capacity of 837,000 wafers during the second quarter, with its capacity utilisation rate rising to 85 per cent, up from 81 per cent in the first quarter
China’ top chip maker Semiconductor Manufacturing International Corp (SMIC) reported strong revenue growth in the second quarter as customers rushed to place orders amid rising geopolitical tensions, according to company data and its executive.
The Shanghai-based foundry’s second-quarter revenue rose 22 per cent year on year to US$1.9 billion, according to financial results published on Thursday. Profits came in at US$165 million, down 59 per cent from a year earlier but up 129 per cent from the first quarter.
Zhao Haijun, SMIC’s co-CEO told analysts on an earning call on Friday that “due to disruptions and changes in the supply chain brought [about] by the geopolitical tensions”, some customers took the opportunity to enter the industrial market, which resulted in “incremental demand” for the company.
The company’s stock price in Hong Kong closed up 5.3 per cent to HK$16.64 (US$2.13) on Friday.
SMIC, which fabricated the 7-nanometre chip for Huawei Technologies last year, boasted a monthly capacity of 837,000 8-inch equivalent wafers during the second quarter, with its capacity utilisation rate rising to 85 per cent, up from 81 per cent in the first quarter and representing the highest reading since the third quarter of 2022.
Chinese customers accounted for about 80 per cent of its revenue in the past five quarters, while in the past quarter the revenue share from America and Eurasia rose to 16 per cent and 3.7 per cent, respectively.
