US-China tech war: top Chinese chip makers push ahead with expansion plans despite political tensions, talk of supply glut
- The strong performance of China’s two largest chip makers comes on the back of a surge in demand for mature-technology chips
- SMIC’s three new factories in Beijing, Shanghai, and Shenzhen all focus on mature 28-nanommetre node and above
China’s top chip foundries are pushing ahead with capacity expansion plans, helped by record-high revenues and profits on the back of strong demand and in the face of US threats to further restrict their access to advanced technologies.
Semiconductor Manufacturing International Corp (SMIC), China’s largest fab, said its capital expenditure in 2022 will be about US$5 billion with most of the funds used for three new fab projects in Beijing, Shenzhen and Shanghai as well as the expansion of existing plants.
The Shanghai-based company’s revenue rose to 35.6 billion yuan in 2021, an increase of 30 per cent year-on-year, while its net profit surged 147 per cent year-on-year in 2021 to a record 10.7 billion yuan, according to its annual report for 2021 released on Wednesday.
Meanwhile, China’s second-biggest chip maker is also expanding its capacity and seeking a secondary listing in Shanghai. Hua Hong Semiconductor’s 2021 revenue increased 70 per cent from a year ago to US$1.63 billion, while its net profit surged almost sevenfold to US$231 million.
The strong performance of China’s two largest chip makers comes on the back of a surge in demand for mature-technology chips from downstream users, such as carmakers and home appliance manufacturers.
