The debut of new Huawei smartphones could not prevent the

The debut of new Huawei smartphones could not prevent the decline in SMIC’s quarterly sales

When it finally became clear in late September that SMIC could be involved in releasing the HiSilicon Kirin 9000S 7nm mobile processors for the latest Huawei Mate 60 smartphones, some investors predicted quarterly revenue of $1.64 billion. In reality, it turned out to be no more than $1.62 billion, according to the company’s reporting.

    Image source: SMIC

Image source: SMIC

Also reportedly China’s largest contract chip maker Bloomberg, reduced third-quarter sales by 15%, marking the third consecutive quarter of decline. Overall, SMIC’s net income was nearly double what was expected, falling 80% to $94 million. According to analysts at Bloomberg Intelligence, the Chinese authorities’ desire for import substitution in the semiconductor industry will certainly ensure high utilization of SMIC’s production capacity.

The company’s revenue should grow again in the current quarter, but it is difficult to predict what impact last month’s tightened US sanctions will have on SMIC’s business. Since the end of August, when the flagship smartphone Huawei Mate 60 Pro based on the advanced 7nm HiSilicon Kirin 9000S processor was introduced in China, SMIC shares have risen almost 40%. It was assumed that orders in this direction would allow the final chip maker to increase sales. In any case, Huawei had nothing to complain about in this situation.

According to Canalys, smartphone shipments in the Chinese market fell 5% in the third quarter, with none of the top five vendors reporting year-over-year growth. Huawei’s share of the local market is now no longer large enough to offset the decline in demand for other brands of smartphones, so SMIC, which serves the company’s interests, has felt a decline in sales. Without Chinese authorities’ desire to support SMIC in the hope of making progress on import substitution, the company’s financial performance in the third quarter could have been even worse.

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Johnson Smith

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