China’s top foundry SMIC says profits halved in first quarter, with ‘no sign’ of a full market recovery yet

Name: An unwinnable conflict? The US-China trade war, 5 years on
Uploaded: 2023-05-11T14:35:22.000Z
Duration: 14 min 45 s
Description: An unwinnable conflict? The US-China trade war, 5 years on

Profits fell by 53.1 per cent year on year to US$267 million during the March quarter, while revenue dropped 20.6 per cent

The Shanghai-based company says it continues to expect a full-year revenue decline, although it will continue with its facility expansion

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A Chinese flag near the Semiconductor Manufacturing International Corp headquarters in Shanghai, China. Photo: Bloomberg

Che Panin Beijing

Published: 10:35pm, 11 May 2023Updated: 11:22pm, 11 May 2023

Semiconductor Manufacturing International Corp (SMIC), China’s top contract chip maker, posted its biggest drop in quarterly revenue in over a decade, reflecting sluggish recovery in global chip demand.

During the three months ended March 31, sales at SMIC dropped 20.6 per cent year on year to US1.46 billion, beating the median estimate of US$1.44 billion by 14 analysts surveyed by Bloomberg.

Quarterly profits fell by 53.1 per cent year on year to US$267 million, higher than the consensus estimate of US$186.6 million, the Hong Kong-listed foundry reported on Thursday.

14:45

An unwinnable conflict? The US-China trade war, 5 years on

SMIC’s declining earnings came as major semiconductor manufacturers have revised down their business outlook.

Leading global wafer foundry Taiwan Semiconductor Manufacturing Co has updated its revenue forecast this year from slight growth to a low-to-mid-single-digit decline. US chip giant Intel Corp last month reported its largest quarterly loss in company history, and said it still expects a loss of 4 US cents a share in the second quarter.

Global sales of the foundry industry could contract by 4 per cent in 2023 due to slow destocking and reduced orders from integrated circuit (IC) design companies, according to TrendForce.

“Demand continues to slide for all types of mature and advanced nodes,” the research form wrote in a recent note.

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