SMIC, China’s largest chipmaker, on Friday posted record quarterly revenue as a global semiconductor shortage boosted demand for its technology, driving its shares higher.
Semiconductor Manufacturing International Corporation (SMIC) announced revenue of $1.8 billion in the first three months ended March 31, a 16.6% rise from the previous quarter and a nearly 67% increase from the year-earlier.
SMIC reported gross profit of $750.3 million for the quarter.
“While the demand for consumer electronics is soft, the demand growth in new energy vehicles, display panels and industrial sectors has led to a short-term intensification of the structural shortage of semiconductor manufacturing capacity,” SMIC said in a statement.
The company added that it expected its quarterly revenue to increase 1 to 3 per cent in the coming three months amid a coronavirus pandemic-fuelled demand for electronics such as smartphones as well as a global semiconductor shortage.
China Covid-19 Surge
However, the company warned that it faced an uncertain risk from China’s continuing Covid-19 outbreaks and associated lockdowns.
“The cities where some of the company’s fabs are located have experienced the epidemic at different times,” SMIC said.
“Facing this challenge, the company went full force to implement various preventative and control measures to guard against the epidemic to build a safety barrier for employees and ensure production, making every effort to assure customer demand”.
SMIC, the fifth biggest semiconductor foundry, said it experienced an “exceptional year” in 2021 despite being put on a US trade blacklist the year before over Washington’s concerns that its chips were being used by China’s military.
SMIC shares, listed on both the Shanghai and Hong Kong stock exchanges, rose as much as 2.4%.
- George Russell