Hello everyone, today let's talk about a heavyweight player in China's chip industry - SMIC. This guy is not simple, ranking fifth in the global wafer foundry industry, with a market share of about 6%. In particular, SMIC is one of the few companies in the world that has mastered 7nm process technology. Yes, you heard it right, it's 7nm, which is more advanced than the public 14nm technology. The story behind this, mention the Kirin 9000s, I believe that you will be able to realize something.
SMIC's customers are all over the world, including not only major American manufacturers such as Qualcomm and Broadcom, but also partners from Europe, Japan and other places. Think back then,In 2017, more than half of SMIC's revenue came from these overseas customers, with U.S. customers accounting for nearly 40% of the contribution. However, the share of customers in Chinese mainland is not small, accounting for about 45%.
However, the situation has changed, and since 2019, the United States' suppression of Huawei has made everyone realize that only when they are strong can they resist external storms. As a result, more and more Chinese IC companies have begun to turn to SMIC to seek OEM cooperation. As a result, SMIC's domestic customers and revenue share have increased dramatically. By 2019, the proportion of revenue from domestic customers has accounted for 50%, while the proportion of revenue in the United States has dropped to 30%. In the following two years, the trend became even more pronounced, with the share of Chinese customers rising to 55% in 2020 and 28% in the US.
Not only that, SMIC has also expanded production frantically in China, investing in the construction of several large-scale chip manufacturing bases. By 2021, the proportion of revenue from domestic customers has reached 65%, and the proportion of revenue in the United States has further decreased to 23%. Later, in 2022, this figure reached 74%, and in the United States it dropped to 21%. By the fourth quarter of 2023, the contribution of Chinese customers has reached 808%, and the United States fell to 157%。
In the past five years, SMIC's customer structure has changed dramatically. Chinese customers increased from less than half to 81%, while orders from US customers fell from 40% to 157%。Obviously, SMIC is gradually becoming the mainstay of China's chip manufacturing industry, and the distance from the United States is getting farther and farther. What do you think of this change? Is it a good thing or a bad thing? Is our chip industry ushering in its own spring, or is it facing more challenges?