Net income in the quarter ended in September fell 80% from a year earlier, greater than the record 64% drop in the second quarter of 2019, according to company data.
Specifically, SMIC achieved revenue of 1.62 billion USD in the last three months, down 15% compared to the same period last year. The company's net income was only 93.98 million USD, much lower than analysts' expectations of 165.1 million USD.
SMIC is China’s largest foundry, specializing in manufacturing contract semiconductor chips designed by other companies. The company is also the main hope for the ambition to boost the domestic semiconductor industry and catch up with the world’s “giants” such as TSMC or Samsung.
“Inventories of our US and European customers remain at record highs,” said a SMIC representative, adding that this was one of the factors negatively impacting their business results.
Global semiconductor sales rose 1.9% in September from a month earlier, showing signs of chip recovery, according to the Semiconductor Industry Association. Globally, September sales fell 4.5% from a year earlier.
“Global semiconductor sales increased for the seventh consecutive month, reinforcing the positive momentum for the overall market,” said John Neuffer, president and CEO of the Semiconductor Association. “The long-term outlook for semiconductor demand remains strong, with chips being an integral part of countless global goods and the future of innovation.”
Also in September, SMIC suddenly attracted attention with its "breakthrough" 5G chip on the latest smartphone model from Chinese technology giant Huawei.
Huawei has been blacklisted by the US Department of Commerce since 2019. Meanwhile, SMIC was also blacklisted a year later.
As the US tightens restrictions on exports of semiconductor technology and equipment to China, the Kirin 9000 chip inside Huawei's Mate 60 Pro phone is considered a heavy blow to Washington. The processor manufactured by SMIC on the 7nm process signals that Beijing may soon make progress in building technological self-sufficiency, although it is still several generations behind the advanced chips made by TSMC or Samsung.
(According to CNBC)
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