ANN/THE STRAITS TIMES – A hoped-for smartphone market recovery is another year out, and geopolitical tensions are fomenting a serious glut in global chipmaking capacity, warned Semiconductor Manufacturing International Corp (SMIC).
That outlook clashes with more upbeat comments from Samsung Electronics and Taiwan Semiconductor Manufacturing Co (TSMC) about mobile demand bottoming soon.
SMIC, China’s largest chipmaker, on Thursday reported its third consecutive fall in quarterly revenue, reflecting the depth of the downturn as well as Washington’s broadening campaign to curb China’s tech sector. That result disappointed investors who had hoped the surprise popularity of Huawei Technologies’ latest smartphones would help offset lost sales.
SMIC is one of the highest-profile companies at the heart of Beijing’s ambitions to build a world-class tech sector less reliant on American innovations. It helped Huawei build the seven-nanometre processor for the Mate 60 Pro, regarded as a breakthrough for two companies the United States blacklisted years ago over national security concerns. Riding nationalist fervour, the device sold out rapidly, taking business away from Apple’s iPhone.
No analysts invoked Huawei during yesterday’s post-results briefing. Instead, SMIC executives spoke about how political tensions had spurred a global build-up of domestic chipmaking capacity. They didn’t name any countries, but the United States (US), China, Japan and Europe are among those shelling out incentives to attract local manufacture.
SMIC’s shares slid as much as 6.6 per cent yesterday, their most in two months, after reporting a larger-than-projected 15 per cent fall in revenue to USD1.62 billion in the September quarter. Net income plunged 80 per cent, also missing estimates. Smaller rival Hua Hong Semiconductor fell more than 12 per cent – its biggest fall in over a year – as its own management warned about a weak fourth quarter after results missed estimates.
