China’s No 2 chip maker fears weakening yuan, not trade war after posting record first-half revenue

Hua Hong Semiconductor, China’s No 2 contract chip maker, which reported record revenues for the first half on rising demand from the United States, is more worried by a weakening yuan rather than the trade war unfolding in the background.

“So far we have not heard concerns on the trade war from our customers,” said Wang Yu, president and executive director of the company, during a conference call on Wednesday afternoon. “But we are cautious about it and are closely monitoring the situation to see if there will be any impact.”

The sharp depreciation of the yuan, on the other hand, is a more sensitive issue, he told analysts, as its raw materials were priced in US dollars.

The yuan has fallen roughly 9 per cent against the US dollar since March.

Revenues in the first half rose 15.4 per cent year on year to a record US$440 million while profit attributable to owners of the group jumped 25.5 per cent to US$85.9 million in the same period, according to the earnings statement filed to the Hong Kong stock exchange.

For the second quarter alone, revenues rose 16.1 per cent year on year to US$230 million, beating a Bloomberg consensus of US$225.1 million.