Record Revenue Posted By China’s Biggest Chipmaker SMIC Despite U.S. Sanctions

Despite a global chip scarcity, China’s largest chipmaker, Semiconductor Manufacturing International Corporation, recorded record revenue and profit last year.

SMIC’s sale for 2021 was $5.44 billion, up 39 per cent year over year, the greatest rate of increase since 2010. Profit increased by 138 per cent year over year to $1.7 billion.

Despite being placed on a US trade blacklist known as the Entity List in 2020, SMIC had a successful year.

“The global shortage of chips and the strong demand for local and indigenous manufacturing brought the Company a rare opportunity, while the restrictions of the ‘Entity List’ set many obstacles to the Company’s development,” SMIC said in a statement.

China’s largest foundry, SMIC is a firm that manufactures chips that are designed by other companies. It competes with companies like TSMC in Taiwan and Samsung in South Korea, but SMIC’s technology is several generations behind.

As geopolitical tensions between China and the United States have risen in recent years, so has their competition for technological dominance. One of these fields is semiconductors. In the chip business, China lags well behind the United States, but SMIC is considered as critical to the country’s goals of increasing self-sufficiency and weaning itself off foreign technology.

The blacklisting, on the other hand, prevents SMIC from accessing vital American technology needed to produce the most advanced chips.

SMIC, on the other hand, may produce some of the less advanced chips found in automobiles. These have been in short supply all across the world. SMIC was predicted to benefit from the chip shortage by China Renaissance last year. That was the case.

SMIC is also continuing to invest aggressively, announcing plans to spend $5 billion on three new plants in Beijing, Shanghai, and Shenzhen, all in southern China.

In 2022, the corporation plans to increase production capacity even more than it did in 2021.

(Adapted from CNBC.com)



Categories: Economy & Finance, Entrepreneurship, Geopolitics, Regulations & Legal, Strategy, Sustainability

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