China’s top fabless chip firms estimate big 2023 losses despite push for greater self-sufficiency in semiconductors
- Loongson cited softness in the industrial chips market and heavy spending on research and development for the weaker performance in 2023
- Analysts say strict US sanctions and limited product catalogues at Chinese firms are hindering domestic chip development
China’s leading chip companies, from Loongson Technology to Cambricon Technologies, expect to log huge losses for 2023 in spite of Beijing’s push for greater self-sufficiency in semiconductors, according to corporate filings.
Loongson Technology, a fabless chip firm that is a firm advocate for domestic semiconductor development, is estimating a full-year loss of 310 million yuan (US$43.36 million) against a 51.8 million yuan profit in 2022. It also expects 2023 revenue to come in at about 508 million yuan, down 31 per cent year-on-year, according to an earnings release on Tuesday.
Meanwhile, Beijing-based Cambricon Technologies, which produces artificial intelligence (AI) accelerators, is projecting a full-year loss of up to 924 million yuan, which would be 40 per cent narrower than its loss in 2022 due to cost-cutting efforts.
It is forecasting 2023 revenue to be slightly down from 722 million yuan in 2022, according to an earnings forecast also issued on Tuesday.
Loongson cited softness in the industrial chips market and heavy spending on research and development for the weaker performance in 2023. Cambricon did not elaborate on the reasons behind its weaker showing.
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Both companies are on a US Commerce Department trade blacklist, which restricts their ability to buy advanced American-origin technologies and sell to certain customers.