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Demand determines the market, and so does the chip industry. At a time when there was a global chip shortage, chip manufacturers received orders softly, and their revenue and profits soared year-on-year. However, after the decline in demand, orders were cut, capacity utilization rate decreased, and basically fell into a situation of overcapacity. SMIC officially announced various results, among which the third quarter results showed that the profit was **78%, which explains a lot of problems.
Since entering 2023, the major chip manufacturers seem to have a hard time. TSMC, the world's largest chip foundry, has been showing performance for several consecutive quarters. Although it still accounts for more than half of the global market share, the trend is already clear.
2023 is coming to an end, and looking at the performance of the whole year, the demand for chips has changed very much, which can be compared with SMIC's performance. SMIC, the mainland's largest chipmaker, has high hopes.
SMIC's revenue last year was as high as 4951.6 billion yuan, a year-on-year increase of 39%. Net profit 1213.3 billion yuan, an increase of 13% year-on-year. In the first half of 2023, revenue will be 2131.8 billion yuan, a year-on-year decrease of 133%, net profit 299.7 billion yuan, a year-on-year decrease of 521%。Broken down to the third quarter of this year, the profit was 67.8 billion yuan, a year-on-year increase of 78%.
Comparing SMIC's performance last year and this year, although the fourth-quarter results have not yet been announced, they have already explained a lot. The demand in the chip market has skyrocketed to **, and there is no much order growth momentum in the field of consumer electronics.
Not to mention SMIC, even giants like TSMC have greatly reduced the capacity utilization rate of 7nm, and have planned to reduce prices by 5% to 10% for sales.
The development trend of the market is closely related to demand, if consumers do not buy smartphones and do not consume, no matter how good the chip process is, no matter how much production capacity is useless. SMIC has four 12-inch wafer fab projects under construction, burning 170 billion yuan, is it just a waste of work?
I'm afraid it can't be prematurely concluded, and the market demand for consumer electronics, smart cars and other fields will be ** in the next few years.
SMIC focuses on mature chip manufacturing, and the 12-inch wafer fabs in Shanghai, Beijing, Shenzhen, and Tianjin are mainly used in 28nm to 180nm processes, covering mainstream industries such as consumer electronics and smart cars. Smart cars require a large number of chips to realize functions such as autonomous driving, Internet of Vehicles, and intelligent perception.
Mature chips can provide high-performance processing power, and the mature chip market is expected to usher in significant growth opportunities. According to a report by market research agency Trendforce, the proportion of mature chip production capacity in Chinese mainland is expected to increase to 39% by 2027.
SMIC's spring may be coming, the larger the mature chip production capacity, the more market demand, and manufacturers who have a large number of mature chip process capacity will have the opportunity to obtain orders.
Not only SMIC, but also giants such as TSMC, Samsung Electronics, and UMC have not given up on the layout of mature chips and are focusing more on this market.
Therefore, it is not possible to conclude whether SMIC is working in vain. The demand for mature chips on the market accounts for much higher than that of high-end chips, and compared with high-end chips, the production capacity of mature chips is more stable and the technology is more mature, depending on who will be in charge of the ups and downs in the future.
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