Chipmaker Semiconductor Manufacturing International Corp (SMIC) reported its third-quarter earnings results on Thursday and missed estimates. The company also warned investors about the effect that the impact of export controls from the US has on its business.
The company reported revenue of $1.91 billion for the third quarter. It was up 34.7 percent from the $1.42 billion the chipmaker reported in the same period a year ago and, however, below analysts’ estimate of $1.94 billion.
SMIC reported a net profit of $574.4 million, a growth of 54.1 percent, while gross profit soared 58.6 percent to $742.2 million.
The company highlighted in its filing that weak demand in the consumer market plus the new export controls from the US would affect its results for the fourth quarter. SMIC noted that these new rules will have an adverse impact on its production and operations. It is working to spell out certain definitions in the rules, the company said.
The US issued a new set of export controls aimed at containing advancement among China’s chip manufacturers in early October. According to experts, these restrictions could hinder SMIC’s ambitions of making advanced chips.
Irrespective of the aforementioned issues, the company went ahead to increase its capital expansion plan for the year from $5 billion to $6.6 billion.
SMIC is one of Asia’s biggest chipmakers and has been described as China’s best hope for becoming a global leader in chip manufacturing. It has also been referred to as the Chinese rival to giant chipmaker Taiwan Semiconductor Manufacturing Corporation (TSMC). In terms of leading-edge technology, SMIC still has a lot of gaps to catch up with before it can be seen as an appropriate rival to TSMC.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional
Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
