Last Year's Strong Performance at SMIC: "Expecting to Benefit from Semiconductor Shortage Again This Year"

[Asia Economy Reporter Yujin Cho] SMIC, China's largest semiconductor foundry, recorded strong performance last year due to increased demand amid the COVID-19 pandemic.

According to the annual report released by SMIC on the 31st, net profit last year rose 141.5% year-on-year to 4.332 billion yuan (approximately 744 billion KRW). During the same period, revenue increased 24.8% year-on-year to 27.471 billion yuan.

As the only foundry company in China, SMIC's foundry business revenue grew 20% year-on-year due to increased demand for semiconductors used in smartphones.

US-based CNBC predicted that SMIC would benefit from the semiconductor shortage this year as it escapes the impact of US sanctions.

CNBC stated, "Due to lockdowns caused by COVID-19, demand for home appliances surged, which is expected to benefit foundry companies," forecasting accordingly.

CNBC also noted that not all industries, including the automotive sector, require cutting-edge chips, and foundry companies like China's SMIC could enjoy the windfall from the semiconductor supply shortage.

Due to US government sanctions, Taiwan's TSMC, the world's top one or two foundry companies, cut off transactions with Huawei, China's largest telecommunications equipment company and smartphone manufacturer, starting last year, further elevating SMIC's strategic position within China.

SMIC is also receiving large-scale, exceptional tax benefits from the Chinese government. Last month, SMIC decided to build a new semiconductor factory in Shenzhen, China's technology hub. The new factory will be a joint venture with the Shenzhen municipal government, with a capital investment of 2.35 billion USD (approximately 2.6 trillion KRW).

This content was produced with the assistance of AI translation services.