Semiconductor Manufacturing International Corp (SMIC), mainland China’s largest contract chipmaker, on Friday downplayed the potential impact of US President Donald Trump’s proposed 100 per cent tariff on imported chips, as stout domestic demand is expected to continue.
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“Our overall capacity remains in a state of demand exceeding supply,” SMIC co-CEO Zhao Haijun said in a briefing after the company reported its second-quarter financial results. “[Even if growth in demand slows], there will be no significant impact on our utilisation rate.”
He said the company has already helped clients build up a certain level of inventory in the first three quarters of the year. Orders and shipments are expected to slow in the fourth quarter, which is the typical off-season for the industry.
Apart from citing SMIC’s limited exposure to the US market and production at its factories running at full capacity, Zhao pointed out that previous tariff disputes resulted in a less than 10 per cent impact on SMIC’s overseas clients.
His assessment reflected Shanghai-based SMIC’s strong confidence in its current global market mix, as China accounted for 84.1 per cent of the firm’s sales in the three months to June. Revenue share from the Americas fell to 12.9 per cent last quarter, from 16 per cent a year earlier.
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SMIC reported second-quarter revenue of US$2.21 billion, up 16.2 per cent from US$1.9 billion a year earlier, but down 1.7 per cent from the previous quarter’s US$2.25 billion.
Net profit attributable to shareholders reached US$132.5 million last quarter, down 19.5 per cent from US$164.6 million a year ago. That also marked a 29.5 per cent decline from US$188 million in the first quarter.