SMIC Says It Is Unable To Keep Up With Customer Demand In The Midst Of Chip Industry Shortage, Sanctions Squeeze: Report

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  • It added that in Q4 2020, SMIC reported sales of $981 million, up 16.9 per cent year on year
  • The company is aiming to expand its capacity this year at its 12-inch fabrication plant by 10,000 wafers per month and by 45,000 wafers per month at its 8-inch fabrication plant

As per a report by Reuters, China’s Semiconductor Manufacturing International Corp (SMIC) said that it cannot meet customer demands for certain mature technologies and its plants have been running “fully loaded” for several quarters. Zhao Haijun, co-CEO of China’s largest chipmaker, made the comments during a conference call after its latest quarterly results. He added that external sanctions would continue to affect the company’s revenue growth.

Remains in talks with suppliers and the U.S. government in hopes of obtaining licenses

It added that in Q4 2020, SMIC reported sales of $981 million, up 16.9 per cent year on year. The company expects revenue to increase in the “mid-to-high” single digits in 2021. The report added that Zhao said that without these influences, SMIC could have maintained last year’s record growth momentum. He added that although external forces cannot be controlled, the company will cultivate new possibilities and opportunities in the face of crisis and changes. Zhao added that the company remains in talks with suppliers and the U.S. government in hopes of obtaining licenses that would allow it to purchase equipment to boost production.

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The company is aiming to expand its capacity this year at its 12-inch fabrication plant by 10,000 wafers per month and by 45,000 wafers per month at its 8-inch fabrication plant. Zhao added that because of expected longer lead times for equipment procurement, most equipment won’t be in place until the second half of this year, so the expansion won’t contribute much to 2021 revenue. Zhao said that SMIC had not felt much of a squeeze for chips in the car sector, but that in other areas, the company has been under intense pressure.

He added that with regard to pricing, the company honours contracts for its long-term clients. But the changes in the market have given the company lots of room for negotiation, which its customers understand.

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