China’s largest chip maker hits record revenue again amid US sanctions

Semiconductor Manufacturing International Corp (SMIC), China’s largest chipmaker, has published reporting for the quarter and all of 2022. The company, which has been under US sanctions since 2020, again showed record financial results. Its annual revenue was $7.2 billion, up 33.6% from 2021, which was also a record year in terms of revenue. Net profit at the end of the year increased by 6.8% and amounted to $1.8 billion.

At the same time, the results of the last quarter of 2022 were rather weak: revenue fell by 15%, to $1.6 billion, and gross profit fell from $742 million to $518 million. And SMIC’s forecasts for the current quarter and the first half of 2023 are rather pessimistic. The company estimates that first-quarter revenue will be 10% to 12% lower than fourth-quarter 2022. And in the first half, SMIC said in a statement, “the production cycle is still at the bottom, the impact of external uncertainties remains complex.” Meanwhile, the company continues to actively invest in expanding production in China. As follows from the reporting, in 2023 its capital expenditures will remain at about the same level as last year, when it invested $ 6.35 billion.

In the blacklist of companies suspected of having links with the Chinese military, SMIC, along with other Chinese companies, appeared in December 2020. The imposed sanctions imply a ban on the sale of American goods and technologies to these companies.

Alena Miklashevskaya

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