Chinese SMIC Sees Positive Feedback for 14nm Chips, Increases Capital Expenditure
Semiconductor Manufacturing International Corporation (SMIC), China’s most advanced and largest foundry, says that its clients are pleased with the company's 14nm chip process technology and decidedto increase capital expenditure by $1.1 billion to a total of $4.3 billion, to meet the market demand.
Dr. Zhao Haijun and Dr. Liang Mong Song, SMIC’s Co-Chief Executive Officers commented, “The company's revenue in the first quarter has reached a historical high of $905 million, an increase of 8% quarter over quarter, and 35% year over year, as market demand and product mix are better than expected. Revenue related to communications, computer and consumer electronics grew, gradually increasing in market share.
Our capacity for mature technology platform applications continue to be fully loaded; the demand for CIS related ICs, power management, fingerprint sensors, specialty memory and other related applications are strong. Advanced technology R&D and business are progressing smoothly, as we continue to expand in communications, smartphone, automotive and consumer electronics related fields. Our customers’ feedback on 14nm is positive; our 14nm is covering both communications and automotive sectors with applications including low-end application processors, baseband and consumer related products. We decided to increase capital expenditure by $1.1 billion to a total of $4.3 billion, to meet the market demand.
We are confident in leading the company in continued growth momentum, focusing on building up competitiveness under uncertainty, providing comprehensive technology and business platform solutions for domestic and global customers, and capturing growth opportunities in the semiconductor industry.”
SMIC announced its consolidated results of operations for the three months ended March 31, 2020. The company's
revenue was $904.9 million in 1Q20, an increase of 7.8% QoQ from $839.4 million in 4Q19, and 35.3% YoY from $668.9 million in 1Q19.
Gross profit was $233.6 million in 1Q20, an increase of 17.1% QoQ from $199.4 million in 4Q19 and 91.4% YoY from $122.1 million in 1Q19.
Gross margin was 25.8% in 1Q20, compared to 23.8% in 4Q19 and 18.2% in 1Q19.
For the second quarter, the company expects:
- Revenue to increase by 3%to 5% QoQ.
- Gross margin to range from 26% to 28%.
- Non-IFRS operating expenses to range from $240million to $245million.
- Non-controlling interests of our majority-owned subsidiaries to range from $0 to positive $10million (losses to be borne by non-controlling interests).
SMIC Group provides integrated circuit (IC) foundry and technology services on process nodes from 0.35 micron to 14 nanometer. Headquartered in Shanghai, China, SMIC Group has an international manufacturing and service base. In China, SMIC has a 300mm wafer fabrication facility (fab), a 200mm fab and a majority-owned joint-venture 300mm fab for advanced nodes in Shanghai; a 300mm fab and a majority-owned 300mm fab for advanced nodes in Beijing; 200mm fabs in Tianjin and Shenzhen; and a majority-owned joint-venture 300mm bumping facility in Jiangyin.