China’s biggest chipmaker SMIC posts record 2022 revenue but warns of a tough year ahead

China’s greatest chipmaker Semiconductor Manufacturing International Corp. posted report income in 2022, regardless of ongoing U.S. sanctions, however warned of a harder yr forward given a droop within the semiconductor trade.

SMIC stated Thursday that 2022 income totaled $7.2 billion, up 34% yr on yr whereas its gross margin stood at a report 38%. That’s the second yr of gross sales progress above 30% for the corporate.

However, SMIC stated income within the first quarter is forecast to lower by between 10% and 12% versus the December quarter.

“Looking forward to 2023, in the first half of the year, the industry cycle is still at the bottom, the impact of external uncertainties is still complex,” the corporate stated in an announcement.

SMIC is one among China’s most vital chip corporations. It is the nation’s largest foundry, which is an organization that producers chips that different companies design. It’s a competitor to the likes of Taiwan’s TSMC and South Korea’s Samsung however SMIC’s expertise is a number of generations behind.

The firm was thrown on a U.S. commerce blacklist referred to as the Entity List in 2020, which has minimize SMIC off from key overseas expertise that will enable it to make extra superior chips.

Demand for sure chips that go into shopper merchandise has slumped, resembling reminiscence, which has badly impacted SMIC in addition to greater corporations like Samsung.

SMIC has been investing aggressively to broaden capability in China. The firm stated its capital expenditures in 2023 are anticipated to remain roughly the identical because the $6.35 billion it spent in 2022.

SMIC stated mass manufacturing at one among its crops generally known as SMIC Jingcheng might be postponed by one to 2 quarters attributable to “the delay of bottleneck equipment.”

The firm didn’t point out whether or not the latest sweeping U.S. export controls, which intention at slicing China off from acquiring or manufacturing key chips and elements, was behind the tools delays.