SMIC shares drop on resignation speculation

Shares of the Chinese mainland’s top chip maker SMIC plunged on Wednesday after news that a top executive intends to resign.

Semiconductor Manufacturing International Corp, listed both in the Shanghai STAR and Hong Kong markets, is aware that co-CEO Mong-song Liang intends to resign and is working to clarify Liang’s plan, the Shanghai-based firm said, without giving details.

SMIC dropped 5.53 percent to close at 55.2 yuan (US$8.11) in Shanghai. Its stock was suspended from trading in Hong Kong in the morning and resumed in the afternoon.

SMIC is a poster child in the Chinese chip industry and in the wave of the country's campaign to develop high-tech industry, especially when it finished a domestic listing in the Shanghai STAR Market in July.

Liang is a veteran in the semiconductor industry and his resignation could influence not only the company but the whole semiconductor industry in China.

Liang is said to be planning to quit after SMIC appointed a vice chairman to the board without consulting him. He handed in his resignation after learning about the appointment of Chiang Shang-yi, a former senior executive at SMIC's larger rival TSMC, according to media reports.

SMIC is also influenced by the US tech export control, the company said in a statement on Wednesday.

SMIC reduced annual spending recently because, as analysts said, that it has been restricted to obtain most advanced equipment to make high-end chips.