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China’s SMIC pushes ahead ‘as planned’ with new chip plants in Beijing, Shenzhen amid US trade restrictions
- SMIC’s new chip fabrication plant in Shenzhen is expected to start commercial operations next year, while the Beijing facility will go online in 2024
- The Shanghai-based semiconductor giant has budgeted US$4.3 billion in total capital expenditure this year
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Semiconductor Manufacturing International Corp (SMIC), mainland China’s largest foundry for integrated circuits (ICs), is on track with the construction of new chip fabrication plants in Beijing and Shenzhen, despite lingering risks of US restrictions that may prevent its acquisition of production equipment.
Those “capacity expansion programmes are rolling out as planned”, said SMIC co-chief executive Zhao Haijun in a conference call with analysts on Friday.
He indicated, however, that risks remain because of certain “uncontrollable factors”, including logistics disruption caused by the Covid-19 pandemic and delays in US approval of export licences to SMIC’s equipment suppliers. The US government, under the previous Trump administration, added SMIC to Washington’s trade blacklist in December last year.
Still, Zhao indicated that the equipment SMIC has ordered are expected to be installed in the second half of this year.
SMIC’s latest update on its infrastructure expansion plans comes a day after the company reported revenue of US$1.34 billion in the three months ended June, up 43.2 per cent from a year earlier, mainly on the back of strong demand from manufacturing enterprises, including those in the consumer electronics, home appliances and car markets, amid a prolonged global semiconductor shortage.
Net profit nearly quadrupled to US$688 million, boosted by the company’s disposal of its 55.87 per cent stake in SJ Semiconductor in April for about US$397 million.
Che Pan joined the SCMP in 2020 and covers China tech news with a focus on semiconductors and AI. Previously, he covered China's economy at Caixin. Che graduated from Sciences Po Paris with a master degree in financial regulations and risk management.
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