➀ The CHIPS Act faces potential cuts and modifications under the new administration; ➁ The flow of equipment to reshore may be reversed; ➂ Recent order cuts and fab delays are negative signs; ➃ SMIC comments indicate overcapacity in China; ➄ US legislators question offshore equipment sales to China.
Recent #SMIC news in the semiconductor industry
➀ SMIC, the leading Chinese semiconductor foundry, reported a record revenue for Q3; ➁ The company remains cautious on expansion amid overcapacity warnings; ➂ The report comes from TrendForce News.
➀ SMIC announced a new investment of 7.5 billion US dollars (about 54.4 billion RMB) to expand production, aiming to challenge the global chip industry's status quo.
➁ The funds will be used for capacity expansion in mature processes like 28nm, technology breakthroughs in advanced processes below 7nm, and enhancing the domestic semiconductor industry's self-sufficiency.
➂ SMIC's goal is to not only become a second TSMC but to create an independent semiconductor supply chain free from US dependence.
➀ SMIC reported a net profit of 135 million yuan in 2024, turning a loss into profit;
➁ The company's operating revenue reached 9.11 billion yuan, a year-on-year increase of 27.72%;
➂ The main reasons for the revenue growth and profit turnaround include increased demand for integrated circuits, continuous R&D investment, and improved product competitiveness.
➀ The formation of the 'China for China' supply chain is accelerating, with the Chinese government aiming for domestic car manufacturers to source 25% of their ICs locally by 2025. ➁ ST has partnered with HHGrace to develop 40nm industrial/automotive-grade MCUs, with mass production expected later this year. ➂ Renesas, NXP, and Infineon are in discussions with Chinese foundries for local sourcing.
➀ China's Big Fund III has begun spending its $47 billion allocation; ➁ The fund aims to support chip production equipment developers and makers; ➂ The investment is part of China's effort to become self-sufficient in semiconductor production.
➀ Huawei sticks to 7nm for its latest processor despite China's stagnation in semiconductor advancements; ➁ The Huawei Mate 70 Pro uses the HiSilicon Kirin 9020 processor with SMIC's 7nm-class technology; ➂ Huawei's reliance on SMIC's technology may delay the adoption of 5nm production until 2026.
➀ The foundry revenue grew 27% YoY and 11% QoQ in Q3 2024, driven by strong AI demand and China's recovery; ➁ TSMC's performance exceeded expectations with high utilization rates at leading-edge nodes; ➃ The recovery of non-AI semiconductors remained slow, and mature-node foundry competition is expected to intensify in 2025.
➀ The author discusses the establishment of the third phase of the major fund and its potential impact on the investment direction.
➁ The author mentions the recent low profile of Liang Mengsong, the co-CEO of SMIC, and reflects on the article he wrote about Liang.
➂ The author predicts that under extreme circumstances, Apple, Intel, and Qualcomm may be the first to fall, with Intel already struggling.
➃ The author highlights the changes in the mobile chip market in 2024, with Mediatek, Qualcomm, Apple, and Unisoc's Zhujin taking the fourth place.
➄ The author reflects on the challenges faced by SMIC and its founder Zhang Yujing, and the potential of SMIC under the leadership of Liang Mengsong.
➅ The author discusses the technological advancements in the chip industry and the importance of domestic demand in China.
➆ The author analyzes the strategy of SMIC and its ambition to achieve advanced manufacturing capabilities.
➀ Huawei's Ascend AI chip progress stalls due to US sanctions; ➁ The 7nm node lags behind TSMC by eight years; ➂ Huawei struggles to secure EUV equipment from ASML.
➀ SMIC reports record-breaking revenue of US$2.17 billion for Q3 2024; ➁ The revenue represents a 14% sequential increase and a 34% year-over-year surge; ➂ The company has exceeded the US$2 billion mark for the first time.
➀ GlobalFoundries has been fined $500,000 by the U.S. BIS for unauthorized shipments of chips; ➁ The shipments were to SJ Semiconductor, an affiliate of SMIC; ➂ The fine follows a Reuters report detailing 74 unlicensed shipments valued at $17.1 million.
➀ SMIC's A-share stock surged, hitting a historical high of 105 yuan at one point during the morning trading session on October 21, with a closing price of 97.48 yuan, up 8.14% from the previous day, marking another historical high.
➁ The stock's year-to-date increase is 70.72%, outperforming the 12.10% rise in the Shanghai-Hong Kong Stock Connect Index.
➂ The rise in SMIC's stock is seen as a sign of the A-share semiconductor market's strength. Analyst Mo Wenyu from XinDa Securities attributes the rise to the strong sci-tech nature of the semiconductor industry and its role as an important part of new quality productivity. The recovery trend in the semiconductor industry is becoming clearer with continuous policy support from the government, presenting long-term investment opportunities.
➀ Hong Kong's semiconductor stock sector surged, with SMIC rising over 20%; ➁ The upsurge is attributed to strong fundamentals and investor optimism; ➂ Semiconductor industry sales reached $53.1 billion in August 2024, up 20.6% year-on-year; ➃ Local production and domestic demand for consumer electronics are driving the recovery in the semiconductor industry.
➀ SMIC reduced its capital expenditures from $12 billion in H1 2023 to $8 billion in H1 2024; ➁ Despite SMIC's reduction, China's overall semiconductor equipment spending has surged.
➀ SMIC has reduced its capital expenditure from $12 billion to $8 billion in the first half of 2024. ➁ The company's spending on buildings and facilities has dropped significantly, as has its investment in machinery and equipment. ➂ SMIC's R&D expenditure as a percentage of revenue has also decreased, from 11.4% to 10.1%.
➀ TechanaLye analysis shows China's semiconductor industry rapidly advancing; ➁ SMIC produces 7-nanometer chips rivaling TSMC's 5-nanometer chips; ➂ Analysis conducted by TechanaLye CEO Hiroharu Shimizu comparing Huawei's Kirin 9010 chip
➀ SMIC's Q2 2024 net profit dropped by 62.9% to $172 million, but revenue increased by 21.8% to $1.901 billion, indicating a recovery in downstream demand. ➁ The company's capacity utilization rate improved to 85.2%, up from 76.8% in Q4 2023, showing resilience in the face of global overcapacity and price wars. ➂ Despite the profit decline, SMIC's strategy of focusing on low-end consumer electronics and domestic chip demand is paying off, with expectations of further growth in the second half of 2024.
❶ The U.S. has sanctioned 18 Chinese semiconductor fabs, but many remain in the white zone, allowing them to purchase equipment. ❷ China is accelerating domestic chipmaking equipment development to reduce reliance on foreign tools in response to U.S. export controls. ❸ SMIC is focusing on expanding capacities at mature nodes and using Western tools for advanced node production, despite U.S. restrictions.
1. TDK has developed a 1,000Wh/L solid-state battery as a replacement for coin cells, utilizing proprietary material technology. 2. CML Micro announces the launch of a Ka-band GaN power amplifier for satellite communication terminals. 3. QuickLogic joins Intel Foundry's Accelerator IP and USMAG Alliances, marking a significant milestone. 4. Intel's 3nm process is in high volume production, delivering performance improvements. 5. SMIC ranks as the No.3 foundry, overtaking GlobalFoundries and UMC.
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