Biz / Tech

Profits and losses for China's chip firms

Zhu Shenshen
Third quarter produced mixed results for the country's integrated circuit firms with some reporting much increased profits while others were making huge losses. 
Zhu Shenshen

Integrated circuit firms, including many listed in the STAR Market, posted mixed results in the third quarter. Some posted 10-fold or higher profit growth with the booming demand for chips while others posted huge losses due to increased spending or waiting technologies to mature commercially.

STAR-listed Kingsemi Co, which provides wafer fabrication for semiconductor manufacturers, posted a net profit of 212 million yuan (US$31.2 million) in the third quarter, 47 times that of a year ago. It was the biggest profit jump in the industry.

Shanghai-based AMEC, the biggest semiconductor equipment vendor in the Chinese mainland, posted a net profit growth that doubled in the third quarter to 277 million yuan. STAR-listed AMEC generated revenue of 1.48 billion yuan in the quarter, a 21.3 percent growth year on year.

Chip designer Will Semiconductor Co posted a record net profit of 1.73 billion yuan, almost 12 times that of a year ago. 

SMIC, the mainland’s biggest chipmaker, raised its revenue and profit margin expectations in the third quarter, the STAR-listed firm announced last month.

Revenue growth in the third quarter will hit 14 to 16 percent, compared with an original forecast of 1 to 3 percent. Gross profit margin will be 23 to 25 percent, compared with a previous forecast of 19 to 21 percent, according to SMIC.

Global integrated circuit market revenue will more than double to US$1 trillion in 2030 with developments such as AI, 5G and smart driving. Despite the pandemic, China is still the world’s most important market with booming demand for on chips featuring 5G, cloud and artificial intelligence functions, according to industry insiders.

Cambricon Technologies, which listed in the STAR Market in July, posted a loss of 310 million yuan in the third quarter, narrowing last year’s loss of 586 million yuan.

Shanghai-based Cambricon, which focuses on AI chip research and development, still needs time to tap into the AI chip market and explore the commercial value of its products, industry insiders said.

Chip assembly and testing firms showed steady growth in the quarter. 

TongFu Microelectronics Co posted a net profit of 262 million yuan in the third quarter, over 10 times that of a year ago. Tianshui Huatian Technology Co generated a net profit of 447 million yuan, a growth of 166 percent. The two Shenzhen-listed firms are among the top three chip assembly and testing firms in the mainland. 

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