China’s chip champion SMIC reports slump in revenue, income for 2023 amid weak market, stiff competition
- Revenue for the full year was US$6.32 billion, compared with US$7.27 billion in 2022, while net income slumped 50.4 per cent to US$902.5 million
- For 2024, the company estimated that revenue growth will be in line with the industry average, although it is not expecting a strong rebound in growth
Semiconductor Manufacturing International Corp (SMIC), China’s top contract chip maker, reported declines in revenue and net income for 2023 amid weakening global demand, stiff competition and high inventory levels.
SMIC’s revenue for the full year was US$6.32 billion, compared with US$7.27 billion in 2022. Net income for the latest year fell 50.4 per cent to US$902.5 million, according to results the company reported on Tuesday.
The Shanghai-based chip maker attributed the slump to weak demand in the global market, rising industry inventory levels compounded by a slower pace of inventory reduction, as well as fierce competition in the semiconductor sector.
Revenue for the fourth quarter of 2023 was an exception – up 3.5 per cent year on year to US$1.68 billion – driven partly by the strong demand for Huawei Technologies’ Mate 60 series 5G smartphones powered by a processor manufactured by SMIC.
Total capital expenditure for 2023 was US$7.47 billion, and it expects capex for 2024 to remain roughly flat.
The company, which was placed on a US trade blacklist in 2020 as a potential national security risk, ranks as the world’s fifth-largest foundry after Taiwan Semiconductor Manufacturing Corp, South Korea’s Samsung Electronics, Taiwan-based United Microelectronics and GlobalFoundries of the US, according to market-intelligence firm TrendForce.