A logo hangs on the Beijing branch building of Semiconductor Manufacturing International Corporation (SMIC) on December 4, 2020 in Beijing, China.
VCG | Visual Group China | Getty Images
China’s largest chipmaker, SMIC, is now the world’s third-largest foundry by first-quarter revenue, according to Counterpoint Research.
State-supported minimum wage, or Semiconductor Manufacturing International Co., had a 6% market share in the first quarter, up from 5% last year, according to the report. He exceeded Global Foundries and that of Taiwan United Microelectronics Society.
This places the SMIC behind only Taiwan semiconductor manufacturing company and South Korean company Samsung Foundry, which had 62% and 13% market share, respectively, in the first quarter.
“SMIC’s quarterly results exceeded market expectations and the company secured third place in foundry revenue market share for the first time in the first quarter of 2024, as demand recovery begins in China, including CIS, PMIC, IoT and DDIC applications,” showed the Counterpoint Research report released Wednesday.
Chips manufactured by SMIC are found in automobiles, smartphones, computers, IoT technologies and much more.
SMIC reported first-quarter revenue of $1.75 billion, up 19.7% from a year earlier as customers stocked up on chips. More than 80% of its revenue in the quarter came from customers in China, the company said in its earnings report.
In the second quarter, the Chinese company expects its revenue to increase by 5-7% compared to the first quarter thanks to strong demand.
China consumes nearly 50% of the world’s semiconductors as it is the largest consumer device assembly market, according to data from technology consultancy Omdia.
The minimum wage is seen as key to Beijing’s hopes of reducing its dependence on foreign technology in its domestic semiconductor industry, as the United States continues to rein in China’s technological might. To boost domestic manufacturing, Beijing has injected billions of yuan in subsidies into its microchip companies.
SMIC has been the target of US sanctions since 2020, under which American companies will have to apply for a license before they can sell to SMIC, thus limiting its ability to acquire certain American technologies.
It has also been unable to procure extreme ultraviolet lithography machines, which only the Dutch company ASML is capable of manufacturing. Without EUV machines, SMIC cannot produce high-tech semiconductors on a large scale and at low cost.
Dealing a blow to US sanctions, a failure of Chinese tech giant Huawei’s Mate 60 Pro smartphone, launched last year, revealed it was running on a 7-nanometer chip made by SMIC. The smartphone also appears to support 5G connectivity despite US attempts to remove Huawei from key technologies, including 5G chips.
However, SMIC still lags behind TSMC and Samsung Electronics, according to analysts.
TSMC and Samsung began mass-producing 7-nanometer chips in 2018 and are currently producing 3-nanometer chips: the smaller the nanometer size, the more advanced and efficient the chip.
cnbc
