Semiconductor Manufacturing International Cooperation (SMIC) on Thursday announced a massive 80% fall in third-quarter profit. SMIC is known as China’s largest chip maker and recently appeared in the spotlight after making a chipset for Huawei’s latest flagship phone.
SMIC said that the third quarter declined up to 80% as compared to the past year. This is the largest decline in SMIC’s quarterly net income since 2019.
In Q3 2023, SMIC generated $1.62 billion in revenue. The company reported $1.91 billion a year ago, which makes the new numbers a 15% decline in year-over-year revenue. On the other hand, the net income was $93.98 million in Q3 2023, down from $165.1 million in Q3 2022.
However, the company is expecting to get some better results by the end of the year. In the aftermath, SMIC predicted that its fourth-quarter revenue could increase by 1% to 3% from Q3.
SMIC and Huawei:
The name of this Chinese semiconductor went viral after the release of the Huawei Mate 60 Pro in August this year. A teardown report from Bloomberg revealed that Huawei has launched a new Huawei Kirin chipset and it is produced by SMIC.
In 2019, the US blacklisted Huawei from purchasing American technologies including chipsets and essential software services to build new smartphones. In the following year, the US expanded the reach of its restrictions and applied new sanctions on both Huawei and SMIC.
Under this ban, Huawei can’t print new chipset designs from manufacturers such as TSMC. On the other hand, SMIC can no longer access new semiconductor production machines from the US domain.
Defying these US sanctions, the Huawei Mate 60 Pro launched with a new Kirin 9000s chipset. Further information about this chipset shows that it is processed with 7nm advanced technology. Interstingly, it resumes 5G network access in Huawei smartphones, which vanished after the 2020 US ban.
Since then, Huawei Mate 60 Pro has been making major sales in China, the only market where the company is currently promoting the new device. Past reports suggest that Huawei sold about 1.6 million devices within six weeks of launch.