October 4 news, although SMIC denied the “U.S. Department of Commerce imposed export restrictions” news, but in order to reduce the impact of the U.S. tightening of export restrictions, SMIC has been “food storage over the winter.” SMIC, China’s largest chipmaker, is “hoarding” key production equipment and important replacement parts, and is even working with other Chinese chipmakers to build a shared stockpile of such components and has set up a central warehouse to store them,media reported.
SMIC’s purchases from upstream suppliers in the US, Europe and Japan have exceeded full-year 2020 demand, with purchases including process equipment such as etching, lithography and wafer cleaners, as well as test benches, and supplies to maintain equipment operations, according to people familiar with the matter.
Earlier, it was reported that the U.S. Department of Commerce has imposed export restrictions on SMIC. But SMIC officials later denied the news, saying the company had not received such official information. The Company reiterates that SMIC only provides products and services to end users for both civilian and commercial use. The company has nothing to do with the Chinese military and does not produce for any military end users.
Second-quarter results showed SMIC’s sales for the second quarter of 2020 were $939 million, up 3.7% quarter-on-quarter and 18.7% year-on-year. Gross margin for the second quarter of 2020 was US$249 million, up 6.4% YoY and 64.5% YoY. Risk production of 14nm chips has been started, with 14/28nm advanced manufacturing accounting for 9.1%. Currently, a third of SMIC’s customers are in the United States.