SMIC Says Unable to Keep Up With Customer Demand for Certain Types of Chips

China’s Semiconductor Manufacturing Worldwide Company (SMIC) can not meet buyer calls for for sure mature applied sciences and its vegetation have been operating “absolutely loaded” for a number of quarters, it stated on Friday.

Zhao Haijun, co-CEO of China’s largest chipmaker, made the feedback throughout a convention name after its newest quarterly outcomes. He additionally stated exterior sanctions would proceed to have an effect on the corporate’s income progress.

SMIC is a key participant in China’s efforts to construct up its home semiconductor manufacturing capabilities, however sanctions by the previous Trump administration have curbed US firms from supplying it.

The corporate can be an necessary participant within the world semiconductor provide chain, which is below heavy stress as pandemic lockdowns drive up demand for electronics comparable to laptops and telephones.

World automakers, particularly, have been caught off guard by the chip scarcity, and companies from Common Motors to Stellantis have introduced that they’ve slowed down manufacturing and furloughed hundreds of staff.

In additional chip-related information, Qualcomm, the world’s largest smartphone chipmaker, warned it’s struggling to meet demand, signaling {that a} world semiconductor scarcity is spreading.

“The scarcity within the semiconductor trade is throughout the board,” stated incoming Chief Government Officer Cristiano Amon.

Like most chipmakers, Qualcomm outsources manufacturing to firms comparable to Taiwan Semiconductor Manufacturing Co. and Samsung Electronics. These suppliers try and up to now failing to alter to a vigorous rebound in demand. The auto sector has complained about this just lately, however Qualcomm’s feedback present the issues are broader.

When the COVID-19 pandemic first struck in early 2020, chip orders initially collapsed. However distant work and finding out has spurred demand for computer systems, whereas automotive shopping for has surged as individuals keep away from public transport. That, in flip, has prompted auto and electronics makers to re-up their chip purchases.

Amon stated orders for chips that run computer systems, vehicles and plenty of different Web-connected units are swamping the trade, which principally depends on only a handful of factories in Asia. Provide ought to enhance within the second half of 2021, he added.

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