China’s SMIC earns record revenue in 2021, boosted by global chip shortage

SHANGHAI (Reuters) – Enterprise boomed final yr for Chinese language chip maker Semiconductor Manufacturing Worldwide Corp (SMIC) on the again of a world chip scarcity, with revenues and earnings hovering regardless of strain from U.S. sanctions, it mentioned.

Gross sales for calendar 2021 have been up 39% on the yr at a report of $5.4 billion, propelled by worldwide demand, the corporate mentioned in an annual monetary report printed on Thursday.

Refinitiv information confirmed it was the corporate’s strongest progress in annual income since 2010.

“The worldwide scarcity of chips and powerful demand for native and indigenous manufacturing introduced our firm a uncommon alternative,” Guo Guangli, the secretary of the board, mentioned on an earnings name on Friday.

Revenue from operations for the yr reached $1.4 billion, a roughly four-fold improve from 2020.

SMIC, which makes bodily laptop chips to the designs of different corporations, has a small share of the chip fabrication sector, which is dominated by Taiwan Semiconductor Manufacturing Co Ltd

However it’s the largest and most superior fab in mainland China, thanks partially to backing from the federal government, which sees semiconductor manufacturing as key to efforts to foster an indigenous, superior chip business.

Gross sales ballooned in 2021 after a world chip scarcity that started in late 2020, driving up costs and bringing a soar in orders.

That yr, the corporate headquartered within the business hub of Shanghai mentioned it might construct three new fabs in Beijing, the capital, in addition to in southern Shenzhen, and its residence metropolis, at a price of a number of billion {dollars} every.

On the earnings name, Guo mentioned SMIC anticipated to open the Shanghai fab in early 2022 and its Beijing and Shenzhen fabs by yr’s finish.

The corporate is pushing forward with enlargement regardless of U.S. sanctions which have shaken plans to maneuver into high-end chip manufacturing.

Late in 2020, Washington put SMIC on the Division of Commerce’s entity listing over issues it had ties to China’s navy, requiring U.S.-based suppliers to acquire licenses to take care of the corporate. SMIC has denied having such ties.

Dutch lithography machine maker ASML Holding NV mentioned it had but to obtain permission to ship to SMIC excessive ultraviolet (EUV) lithography machines wanted to take advantage of superior chips.

On Friday, firm officers instructed traders that orders from SMIC’s suppliers nonetheless take a very long time to fill due to the curbs.

The corporate has additionally been by way of modifications in its government management because the sanctions and lack unfolded.

In November Chiang Shang-yi resigned from the place of vice chairman roughly a yr after becoming a member of the corporate, together with three board members.

Two months earlier SMIC’s chairman, Zhou Zixue, had additionally resigned, citing well being causes.

(Reporting by Josh Horwitz; Enhancing by Clarence Fernandez)