China’s largest chipmaker called Semiconductor Manufacturing International cooperation (SMIC) reported a record revenue and a surge in profits last year amid a global Chip shortages but with strong demands. SMIC revenue was a record 5.44 billion dollars in 2021 up 39% year-on-year.
SMIC, which makes physical computer chips to the design of other companies, has a small share of Chip fabrication sector which is dominated by Taiwan Semiconductor Manufacturing co.ltd.
“The global shortage of chips and strong demand for local and indigenious manufacturing brought our company a rare opportunity” Guo, the secretary of the board said on Friday.
SMIC is the largest and the most advanced fab in China mainland and has received support from the Chinese government which is fostering indigenous semiconductor manufacturing to counter US sanctions and restrictions on the technology.
The sales for the company boomed last year due to high demands brought by covid-19 pandemic and global shortages in semiconductor chips which began in 2020.
SMIC is also expanding by constructing new three more fabs, one in Shanghai, the second in Beijing the capital city and the third in Shenzhen. Shanghai fab will open this year with Beijing and Shenzhen fabs opening next year.
Despite US sanctions on the company, SMIC is pushing a head with expansion even though US sanctions have shaken its plans to move into high end chips manufacturing. I think the company is waiting for the maturity of local technologies since it can’t import more new machines to make advanced chips.
In late 2020, US commence department put SMIC on the entity list over concerns it had ties with Chinese military, which required U.S companies which supply SMIC to obtain license inorder to deal with the company.
Dutch lithography machine maker ASML Holding NV said it had yet to receive permission to ship to SMIC extreme utraviolent (EUV) machines needed to manufacture the most advanced chips.
The company said on Friday that orders from the company takes long due curbs brought by US sanctions.
In 2020, the company made a profit of 1.4 billion dollars which is far less than the profits made in 2021.