China’s Semiconductor Manufacturing International Corp (SMIC, 中芯) cannot meet customer demands for certain mature technologies and its plants have been running “fully loaded” for several quarters, it said yesterday.
Zhao Haijun (趙海軍), co-CEO of China’s largest chipmaker, made the comments during a conference call after its latest quarterly results.
He also said that external sanctions would continue to affect the company’s revenue growth.
In the fourth quarter of last year, SMIC reported sales of US$981 million, up 16.9 percent year-on-year, but the company expects revenue to increase in the “mid-to-high” single-digit percentages in 2021.
“Without these influences, SMIC could have maintained last year’s record growth momentum,” Zhao said. “Although we cannot control external forces, we will cultivate new possibilities and opportunities in the face of crisis and changes.”
SMIC is a key player in China’s efforts to build up its domestic semiconductor manufacturing capabilities, but sanctions by the administration of former US president Donald Trump have curbed US companies from supplying it.
Zhao added that the company remains in talks with suppliers and the US government in hopes of obtaining licenses that would allow it to purchase equipment to boost production.
The company is aiming to expand its capacity this year at its 12-inch fab by 10,000 wafers per month and by 45,000 wafers per month at its 8-inch fab.
However, because of expected longer lead times for equipment procurement, most equipment would not be in place until the second half of this year, so the expansion would not contribute much to revenue this year, Zhao added.
SMIC is an important player in the global semiconductor supply chain, which is under heavy pressure as lockdowns amid the COVID-19 pandemic drive up demand for electronics, such as laptops and smartphones.
Global automakers have been caught off guard by the chip shortage, and firms from General Motors to Stellantis have announced that they have slowed down production and furloughed thousands of workers.
Zhao said that SMIC had not felt much of a squeeze for chips in the auto sector, but that in other areas, the company has been under intense pressure.
He added that with regard to pricing, the company honors contracts for its long-term clients, but that the changes in the market have given the company lots of room for negotiation, which its customers understand.
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