China’s SMIC ranks as world’s third-largest chip foundry by sales in first quarter on back of strong domestic demand

SMIC accounted for 6 per cent of global chip foundry sales in the first quarter, behind TSMC’s 62 per cent share and Samsung’s 13 per cent share

The Shanghai-based firm’s latest ranking reflects how its strategic pivot to serve mainland clients has helped reduce the impact of US tech sanctions

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Semiconductor Manufacturing International Corp’s sales are expected to record double-digit growth in the current quarter, according to research firm Counterpoint. Photo: Shutterstock

Published: 8:00pm, 23 May 2024

Semiconductor Manufacturing International Corp (SMIC), mainland China’s biggest contract chip maker, has become the world’s third-largest integrated circuit (IC) foundry by sales for the first time on the back of strong domestic demand, despite rigid sanctions imposed by the United States government.

Shanghai-based SMIC, which was added to the US trade blacklist in 2020, accounted for 6 per cent of global chip foundry revenue in the first quarter, according to a report on Wednesday by tech research firm Counterpoint. That ranked SMIC behind industry leader Taiwan Semiconductor Manufacturing Co (TSMC), with a 62 per cent global market share, and Samsung Electronics, with a 13 per cent share, in the same period.

SMIC’s sales are expected to record double-digit growth in the current quarter amid a recovery in domestic demand for image sensors, power-management chips and display driver ICs, according to Counterpoint.

The company’s latest ranking reflects how the strategic pivot to serve clients in its home market has helped reduce the impact of US tech sanctions and managed to overcome the global semiconductor market’s typical seasonal sales slowdown in the first quarter.

A Kirin 9000s chip, fabricated by Semiconductor Manufacturing International Corp, is taken from Huawei Technologies’ Mate 60 Pro 5G smartphone in Ottawa, Ontario, Canada, on September 3, 2023. Photo: Bloomberg

SMIC generated 82 per cent of its total US$1.75 billion first-quarter revenue from mainland clients, up from 75.5 per cent in the same period a year earlier and 80 per cent in the December quarter, according to the Chinese chip maker’s latest financial results published earlier this month.

A third-party teardown of Huawei Technologies’ Mate 60 Pro 5G handset last September found that SMIC was behind the advanced processor used in the smartphone released in late August, which prompted calls in Washington for an investigation of how that chip was made in China amid existing US tech restrictions.