China’s Leading Chipmaker SMIC Undergoes Executive Reshuffle, Q3 Sales Total $1.4 Billion

Semiconductor Manufacturing International Corporation (SMIC), China’s top producer of semiconductors, announced on Thursday that Jiang Shangyi has stepped down as vice chairman, executive director and member of the strategic committee of the board of directors, effective Wednesday. Jiang made the decision because he wanted to spend more time with his family. The announcement stressed that Jiang had no disagreement with the board of directors, which was also confirmed by Jiang himself.

Jiang is 75 years old and has worked in the semiconductor industry for more than 40 years. When working at TSMC, he was responsible for R&D and led research of ten key nodes such as 0.25 um (micron) to 16nm (nano) FinFET.

The announcement also revealed that Liang Mengsong, executive director and co-CEO of SMIC, has resigned as executive director, effective from Wednesday as well. His resignation gives him more time to focus on performing his duties as co-CEO of the company, a role he will retain.

In addition, Zhou Jie resigned from his position as non-executive director of SMIC, while Yang Guanglei resigned as an independent non-executive director. In this case, the board members of SMIC has decreased from 15 to 11.

On the same day as the above announcement was released, SMIC unveiled its financial report for the third quarter this year. The report suggests sales revenue in Q3 reached $1.415 billion, an increase of 5.3% compared with $1.344 billion in Q2.

The gross profits in Q3 were $468 million, an increase of 15.5% compared with $405 million in Q2. Additionally, the gross profit margin in Q3 was 33.1%, while that in Q2 was 30.1%.

In Q3, SMIC’s revenue by application was 31.5% for smart phones, 12.5% for smart homes, 24.1% for consumer electronics and 31.9% for others.

Regarding service types, wafer foundry occupied a higher proportion than Q2, at 93.9%. Meanwhile, the proportion of light mask manufacturing, wafer testing and other products decreased from 8.3% in Q2 to 6.1% in Q3.

Regarding the revenue contribution by region, the Chinese region contributed 66.7%, Eurasia accounted for 13% and the U.S. accounted for 20.3%.

SMIC executives said: “Since SMIC was included on the ‘Entity List’ by the U.S. [which restricts trade with specified firms], the company has faced great challenges in production and operation. Since the beginning of 2021, the company  focused on ensuring production continuity and continuous capacity expansion, reorganizing the supply chain, optimizing the procurement process, speeding up supplier verification, and improving production planning and engineering management. We now have stabilized production continuity, and achieved the overall production expansion progress as scheduled.”

SEE ALSO: Huawei, SMIC Suppliers Receive Licenses Worth Billions of Dollars for Exporting U.S. Goods

SMIC expects to maintain its growth momentum in Q4. Its sales revenue is expected to increase by 11% to 13% month-on-month and gross profit margin is expected to register between 33% and 35%. Based on the performance of the first three quarters and the guidance of Q4, its annual sales revenue growth target will reach a new high to about 39%, and the gross profit margin target will remain at about 30%.