At present, the global chip market is experiencing a stage of demand transformation. During the global chip shortage, chip manufacturers continued to place orders, and revenue and profits increased sharply year-on-year. However, as demand declined, orders were cut, capacity utilization decreased, and the entire industry fell into the dilemma of overcapacity. SMIC said in the announcement that the profit in the third quarter was **78%, which reflects the many problems facing the current chip market.
The current shift in demand in the chip market has had a significant impact on the industry as a whole. In the past 2023, the global chip market has experienced huge demand changes, and SMIC's performance also confirms this from the side. SMIC, as the largest chip manufacturer in Chinese mainland, is highly anticipated, achieving amazing results last year, with revenue of 4951.6 billion yuan, a year-on-year increase of 39%;Net profit reached 1213.3 billion yuan, a year-on-year increase of 13%. In the first half of 2023, SMIC's revenue will be 2131.8 billion yuan, a year-on-year decrease of 133%, and the net profit decreased by 521%, only 299.7 billion yuan. Further broken down to the third quarter of this year, SMIC's profit was ** to 67.8 billion yuan, a year-on-year decrease of 78%. By comparing the performance of last year and this year, it can be seen that the chip market demand has changed dramatically, and the order growth momentum in the field of consumer electronics has not been large. Not only SMIC, but even TSMC, the world's largest chip foundry, has also performed for several consecutive quarters**. Although TSMC still occupies more than half of the global market share, the downward trend of its performance is already visible.
The development trend of the market is closely related to the demand. If consumers don't buy smartphones or consume them, no matter how advanced the chip technology and how abundant the production capacity is, it will not change the current situation. At present, the global chip market is facing many challenges, such as the instability of the ** chain, the shortage of raw materials and other problems. These issues have affected the capacity utilization rate of chipmakers, resulting in an oversupply in the market. Giants such as TSMC are already planning to cut sales by 5% to 10% in response to the decline in market demand.
However, the market demand for consumer electronics, smart cars and other fields is expected to pick up in the next few years, which may indicate that SMIC's spring is coming. SMIC focuses on mature chip manufacturing, and its four 12-inch wafer fabs are mainly used for 28nm to 180nm process processes, covering mainstream industries such as consumer electronics and smart cars. Especially in the field of smart cars, a large number of mature chips are needed to realize functions such as autonomous driving, Internet of Vehicles, and intelligent perception, so the mature chip market will usher in huge 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. Manufacturers with a large number of mature chip process capacities will have the opportunity to get more orders.
Not only SMIC, but also chip giants such as TSMC, Samsung Electronics, and UMC are actively laying out the mature chip market. Compared with high-end chips, the demand for mature chips accounts for a higher proportion, its production capacity is more stable, and the technology is more mature. Therefore, it will be up to the market to decide who will be invincible in the industry in the future.
For SMIC, the current decline in profits and the burning of 170 billion yuan of investment does not mean that the effort was in vain. Despite the fluctuations in market demand, we cannot jump to conclusions. With the development of the market and the recovery of demand, the mature chip market will present huge growth opportunities. As the largest chip manufacturer in Chinese mainland, SMIC has large-scale mature chip process production capacity and is expected to get more orders when market demand increases.
At present, the global chip industry is undergoing changes, and the continuous changes in market demand have brought challenges to the entire industry, as well as opportunities for enterprises. In order to be invincible in the highly competitive market, enterprises need to flexibly respond to changes in market demand, strengthen technology research and development innovation, improve capacity utilization, and strengthen marketing and brand promotion to win the trust and favor of more customers.
In short, in the current market environment, chip manufacturers need to have an in-depth understanding of market demand changes, grasp market trends, and flexibly adjust their strategies in order to occupy a favorable position in the fierce market competition. As the largest chip manufacturer in Chinese mainland, SMIC has rich experience and strong strength, and is expected to grow in the future market.
Looking back at the entire market, it is not only SMIC that needs to respond to changes in market demand, but also as a self-editor, we should always pay attention to the dynamic changes in the market and continue to improve our professional knowledge and writing skills to provide more valuable content. Only by keeping up with the pace of scientific and technological innovation can we continue to make progress in the industry and achieve better development. Let's work together to make more contributions to scientific and technological innovation!