Shanghai-based chip foundry Semiconductor Production Global Company (SMIC) on Thursday unveiled its first quarter monetary effects, revealing that the state-owned corporate accomplished a earnings of $1.75 billion, representing a 19.7% year-on-year build up. This outcome marks the primary age that SMIC surpassed each United Microelectronics Company (UMC) and GlobalFoundries in quarterly earnings, with the 2 Taiwan-based companies reporting revenues of $1.71 billion and $1.549 billion respectively for a similar duration.
The score does now not come with IDM (Built-in Software Producer) firms similar to Intel and Samsung.
Why it issues: Amid US sanctions on Chinese language chip construction, SMIC’s enlargement indicators China’s efforts to make stronger its home semiconductor features and let go reliance on overseas providers.
Main points: Its first quarter monetary effects park SMIC 2d some of the global’s wafer foundries, albeit with a substantial hole to TSMC, which reported a earnings of $18.262 billion for a similar duration.
Within the first quarter, SMIC shipped 1.79 million gadgets of 8-inch wafers, a 7% build up in comparison to the former quarter. The corporate’s capability usage price reached 80.8%, up by means of 4% quarter-on-quarter.
Earnings distribution throughout chip-related trade branchs is as follows: smartphones account for 31.2%, computer systems and drugs for 17.5%, client electronics for 30.9%, IoT (Web of Issues) and wearables for 13.2%, and commercial and car for 7.2%.
Earnings from China makes up 81.6% of the company’s general, generation the USA contributes 14.9%, and the EMEA (Europe, Center East, and Africa) patch accounts for three.5%.
Alternatively, SMIC’s internet benefit for the quarter plummeted by means of 68.9% in comparison to the former 12 months, to $71.8 million. The semiconductor business as a complete witnessed a considerable decrease in income in early 2024 because of product worth drops and stock backlog, consistent with native media outlet Jiemian. SMIC instructed Jiemian that this internet benefit decrease used to be essentially because of shifts in product collection, depreciation, and decreased funding returns.
SMIC CEO Zhao Haijun disclosed that the corporate gained pressing orders from consumers within the smartphone and pc sectors within the first quarter, the similar Jiemian document mentioned. Efforts are underway to coordinate orders from lower-priority consumers for not on time processing, and the 12nm chip manufacturing layout is nearly at complete capability, Zhao mentioned.
Context: Due to the AI-related wishes of Nvidia and AMD, orders of TSMC’s complicated packaging capability, together with Chip-on-Wafer-on-Substrate (CoWoS) and Machine-on-Built-in-Chip (SoIC), were absolutely booked for 2024 and 2025, consistent with an Financial Day-to-day Information document from utmost generation. TSMC predicts a compound annual enlargement price of fifty% for AI chips over the later 5 years. By means of 2028, AI chip orders are anticipated to give a contribution over 20% to the corporate’s general earnings.
