SMIC Vows to Triple 300-mm Production Capacity Despite U.S. Sanctions

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Despite all odds, SMIC is poised to survive and grow, the company says.

www.tomshardware.com, Nov. 16, 2021 – 

SMIC, China's largest foundry, has faced extraordinary difficulties in the past 12 months after it got into the U.S. Department of Commerce's Entity List, which essentially barred the company from developing sub-10nm fabrication technologies and created challenges with obtaining new equipment. Yet in spite of all odds, the foundry remains bullish and plans to triple its production capacity in a few years, the firm said.

"We are planning to triple our capacity for 12-inch wafers in the coming years," said Dr. Haijun Zhao, the company's co-CEO, reports Nikkei.

"Since SMIC was placed on the "Entity List" by the U.S., the company has faced tremendous challenges in production and operations," SMIC's management said in a statement. "Since the beginning of the year, we have focused on the two main priorities of ensuring operation continuity and continuous capacity expansion, realigning the supply chain and finding ways to optimize the procurement process, accelerate supplier qualification, and improve production planning and engineering management."

Based on SMIC's financial results, the company's management has succeeded in meeting the foundry's urgent needs. The company earned $1.415 million revenue in Q3 2021, up a whopping 30.7% year-over-year as well as an increase of 5.3% quarter-over-quarter. The company's net profits for the quarter reached $321 million, a 25% YoY surge.

Like other foundries, SMIC has probably revised its quotes due to overwhelming demand and an over 100% utilization, but without sufficient (and consistently expanding) production capacities its sales could not have risen by one third year-over-year.

"Operation continuity has been basically stabilized, expansion of mature technology is progressing in an orderly manner and overall as scheduled, and advanced technology business is steadily improving," the statement from the management reads.

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