Largest Chinese chipmaker to up capacity following record revenue
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The Chinese SMIC is on its way to becoming one of the biggest microchip manufacturing firms despite severe US sanctions hindering the firm in various ways.
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China is climbing up the ranks of the microchip industry in light of the global crisis (Asia Times)
The largest chipmaker in China, Semiconductor Manufacturing International Corp (SMIC), is expanding its factories, which it said was going smoothly, adding that there were three projects upon whose completion its output would increase.
Despite the ongoing US crackdown, SMIC reported a record-high revenue of $1.61 billion in Q4 2021, a 53.8% year-on-year increase.
SMIC said its revenue was $5.4 billion in 2021, with a 39.9% annual growth rate, which makes it the fastest-growing firm among the top four chip manufacturing in the world in 2021.
The growth, according to the company itself, is due to the sales increase brought in via wagers, not to mention income from investments and financial assets.
Despite 2022 being SMIC's peak investment period, and its capital expenditure is expected to reach $5 billion, its development saw many difficulties as the US Commerce Department added it in December 2020 to its Entity List. The placement banned its access to advanced manufacturing equipment from US suppliers over alleged ties to the Chinese military.
The worldwide microchip shortage and high demand from local manufacturing created the perfect environment for the company.
The firm said it would always follow compliance operations, adhere to internationalization, and deeply integrate into the global industrial chain.
Despite the first round of sanctions, the Biden administration was considering in December 2021 to impose tougher sanctions on SMIC in a bid to counter China's technological advances.
The Chinese foreign ministry harshly criticized such behavior and vowed to defend the legitimate rights and interests of national firms.
Global chip shortages and supply chain bottlenecks have affected the automotive, healthcare, and telecom industries, among others. In an effort to lessen its dependence on US and Asian supply, the European Commission announced it will ease funding rules for innovative semiconductor plants on Tuesday.
The regulations aim to prevent unlawful and unjust subsidies given to corporations by EU members for innovative chip manufacturing.
According to analysts, a shortage of microchips in manufacturing processes in the US cost the US economy $240 billion last year, with electronics companies bearing the brunt of the impact.
