Chinese SMIC’s net profit fell by 80% in the third quarter – Kommersant

Revenue of the largest Chinese semiconductor manufacturer Semiconductor Manufacturing International Corp. (SMIC) in the third quarter decreased by 15%, to $1.6 billion. The company’s net income fell 80%, amounting to $94 million – almost half the forecasts of analysts surveyed by FactSet. The reporting was presented on the evening of November 9, and the next day, November 10, SMIC shares on the Hong Kong Stock Exchange fell by 7%.

Chip makers are suffering from falling demand for consumer and enterprise electronics amid macroeconomic uncertainty and the effects of a surge in demand since the pandemic began several years ago. In October, the world’s largest semiconductor manufacturer, Taiwanese company TSMC reported about a 25% drop in profits.

SMIC Co-CEO Zhao Haijun said the recovery in chip demand that was expected at the beginning of the year has not materialized. He noted that the company does not see any impulses or reasons for significant market growth in the near future. Mr Zhao also noted that “geopolitical factors” are leading to duplication of chip production and supply chains in different countries, which could lead to the creation of excess production capacity in the world. Amid tensions between the US and China, many companies are looking to… diversify chip supply chains and are opening factories outside of China.

Yana Rozhdestvenskaya