SHANGHAI – Chinese chip foundry Semiconductor Manufacturing International Corp (SMIC) reported a 34.7 per cent rise in third-quarter revenue on Thursday, missing estimates, and warned investors about the impact of export controls from the United States.
The company generated revenue of US$1.91 billion (S$2.63 billion) for the quarter, up from US$1.42 billion for the same period a year earlier but below analyst expectations of US$1.94 billion.
Net profit rose 54.1 per cent to US$574.4 million, while gross profit increased 58.6 per cent to US$742.2 million.
Shares in the company opened up 3.7 per cent, but then fell and stabilised at about 0.5 per cent above the previous close.
SMIC executives said that weak demand in the consumer market, coupled with new export controls from the US, would weigh on its fourth-quarter results.
“According to a preliminary interpretation, the new rules have an adverse impact on our production and operation,” co-chief executive Zhao Haijun told investors on an earnings call, adding it was too soon to forecast the precise effect.
Despite this, the company lifted its capital expansion plan for the year to US$6.6 billion from US$5 billion.
Backed by funding from Beijing, SMIC is China’s best hope for becoming a global leader in chip production that can rival Taiwan Semiconductor Manufacturing Co, the industry’s largest foundry.
The company remains generations behind in leading-edge technology and has been in Washington’s crosshairs in recent years amid an ongoing spat with Beijing over chip technology.
In early October, the US Department of Commerce released a sweeping set of export controls aimed at containing China’s chip manufacturers. The restrictions are further set to hamper SMIC’s ambitions for making advanced chips, experts say.
Earlier on Thursday, Chinese chip manufacturer Hua Hong Semiconductor reported a 39.5 per cent year-on-year rise in revenue to a record high of US$629.9 million, while net profit rose 83.7 per cent. REUTERS