SMIC is the largest and most technologically advanced wafer fabrication company in mainland China and one of the world's leading foundries. The reason why the name is "international" shows that SMIC is a global foundry company.
As a result, SMIC's customers are all over the world, including Qualcomm and Broadcom. In the past, overseas customers contributed more than 50% of revenue, but now this proportion continues to decline. In this regard, some experts said that they have begun to take on heavy responsibilities!
For a long time, the development of our chip industry has been backward, and one of the important reasons is that it started late. In fact, we began to exert efforts more than 30 years ago, when in order to develop the chip industry, the country led two important projects in a row.
In the end, however, it did not work because, in addition to our inexperience, was the constraints of the Wassenaar Agreement.
This agreement is led by the United States and jointly implemented a technological blockade against China by Western developed countries, including chip-related technologies. As a result, we simply can't buy advanced equipment or technology, and even if we do, we're several generations behind others.
At this time, Zhang Rujing appeared, although he was taken to Taiwan, China since he was a child, but his father was concerned about the motherland, and Zhang Rujing was also affected. Later, like Zhang Zhongmou, he went to work at Texas Instruments and won the title of "Factory Maniac".
In 2000, Zhang Rujing came to the mainland to found SMIC. In order to circumvent Western restrictions, SMIC was founded as a foreign-owned enterprise, and is now controlled by state-owned enterprises. Even so, SMIC's purchase of equipment has been restricted.
Through personal connections, Zhang Rujing found a guarantee from the American church, and only then did he obtain the first batch of equipment, and SMIC got off to a smooth start.
There are many industrial chains involved in wafer manufacturing plants, and if it weren't for a big guy like Zhang Rujing, the chip factory would not be able to find a direction to start. Zhang Rujing not only got the hardware right, but also brought a technical team of 300 people to promote the development of SMIC.
In this way, SMIC achieved the fourth place in the world in only four years, but it was also targeted by Zhang Zhongmou and sued SMIC, causing Zhang Rujing to leave. After that, SMIC went through a lot of twists and turns until it invited technology boss Liang Mengsong.
Soon, SMIC broke through from 28nm to 14nm, followed by 12nm, then N+1 and N+2.
However, the U.S. naturally didn't want to see the rise of SMIC, so it began to impose restrictions, at first making a fuss about lithography machines, blocking ASML from shipping EUV lithography machines to SMIC, and later adding SMIC to the entity list.
So far, if SMIC wants to open up its development, it can only cooperate with domestic upstream and downstream manufacturers, and the result is indeed so.
In 2007, Chinese companies accounted for 45% of revenue, and US companies accounted for 40%, and by the end of 2023, Chinese companies accounted for 81% and US companies accounted for 16%.
As can be seen from the chart above, the proportion of revenue contributed by Chinese enterprises has been increasing, and now it accounts for more than 40%. The proportion of revenue contributed by U.S. companies continues to decline, and the decline is still very large, and now only about 16% is left.
This trend shows that SMIC's orders from mainland customers are growing rapidly, while orders from US companies are plummeting.
In fact, it is not surprising that in recent years, the United States has continued to increase chip restrictions on us, not only from the lithography machine and other equipment, but also to ask American companies not to use chips from mainland manufacturers, including chips manufactured by Chinese enterprise wafer factories.
In the face of restrictions on the development of advanced processes by the United States, SMIC adjusted its thinking and focused on increasing the production capacity of mature processes. In recent years, SMIC has invested 170 billion yuan to build four mature process wafer fabs in Beijing, Shenzhen, Shanghai and Tianjin.
SMIC's production capacity has been rapidly increased, and more Chinese enterprise customers have been ushered in. Because in the case of tightening chip restrictions in the United States, Chinese companies have begun to choose wafer factories in the mainland as much as possible to reduce possible risks in the future.
In fact, foreign orders have not decreased much, but more mainland manufacturers occupy most of the new production capacity.
If it is not restricted, it is not impossible for SMIC to catch up with TSMC, and the key is that equipment and materials still rely on foreign countries. To this end, SMIC has been working with relevant domestic manufacturers for many years to promote breakthroughs in the domestic industrial chain!
In this regard, some foreign media directly said that SMIC is getting farther and farther away from the United States. SMIC has increasingly taken on the important task of driving the domestic chip manufacturing industry. Of course, it is not only the improvement of mature process capacity, but also the breakthrough of advanced process!