Major Chinese chip firms report strong H1 sales despite US crackdown
Published: Aug 13, 2022 12:18 AM


Several leading semiconductor companies in China, including the largest producer and major component suppliers, reported strong results in the first half of 2022, despite the US' relentless crackdown against China's chip industry.

The stellar performances came as market expectation for greater development in the Chinese semiconductor industry continues to build up, with major new development plans, as the US recently intensified efforts to contain China's chip industry.  

China's largest chipmaker, Semiconductor Manufacturing International Corp (SMIC), reported better-than-expected revenue of $1.903 billion in the second quarter of this year, up by 3.3 percent from the previous quarter and up 41.6 percent year-on-year.

Yangzhou Yangjie Electronic Technology Co, which makes semiconductor spare components, reported first-half revenue of 2.951 billion yuan ($438 million), a year-on-year increase of 41.92 percent.

Amlogic (Shanghai) Co, another component firm, reported revenue of 3.107 billion yuan in the first half, an increase of 55.22 percent.

Sino Wealth Electronic, which designs and sells integrated circuits and provides after-sales and technical services, said that first-half revenue totaled 902 million yuan, an increase of 31.5 percent.

These reports came after US President Joe Biden on Tuesday signed into law the so-called CHIPS and Science Act, which aims to crack down on China's semiconductor supply chain.

The growth reported by Chinese chip companies reflect years of innovation and input, Ma Jihua, a veteran technology analyst, told the Global Times on Friday.

The Chinese government gave the chip sector national priority, after the US government began to pursue a decoupling policy on the chip industry directed toward China years ago during the Trump administration era. The Chinese government announced several support policies for the industry, and input by the companies further spurred the sector's progress, said Ma.

"It's time to harvest years of efforts," Ma said. 

More efforts are on underway. The Lingang New Area in Shanghai on Friday announced a plan for the period through 2025, aiming to boost the scale of the IC industry to exceed 100 billion yuan. The new area will also foster five leading chip manufacturer in China and abroad, five equipment and materials companies with an annual income of more than 2 billion yuan, more than 10 unicorns and more than 10 listed companies.

China's integrated circuit industry posted stable growth in 2021 with sales exceeding 1 trillion yuan for the first time, according to the China Semiconductor Industry Association.

Rising demand has prompted major investment. In 2020 and 2021, the average annual financing of China's semiconductor industry exceeded 200 billion yuan. In 2021, there were 686 investment and financing transactions in the sector, a year-on-year increase of 43 percent, a report by information provider said in July.

Chinese analysts said Chinese companies are actively looking for chip suppliers in response to the blows of the US government, which also gives Chinese chip producers new opportunities. 

Although the growth rate of mobile phone shipments has been weak recently, the development of the entire electronic product industry is accelerating, and the trend of intelligence is increasing, which shows that the overall demand for chips is still strong, Ma added.

SMIC said in a filing on Thursday that it is certain the IC industry's demand growth and global localization trend, as well as the long-term logic of indigenous manufacturing, remain unchanged, although there are short-term adjustments, and management is confident in the company's medium- to long-term growth.