SMIC lifts Capex to $6.6 bn from $5 bn

Semiconductor Manufacturing International (SMIC) has reported a 34.7 percent rise in third-quarter revenue and lifted its capital expenditure plan.
SMIC at a trade eventSMIC generated revenue of $1.91 billion in the quarter, up from $1.42 billion in the same period a year earlier but below analyst expectations of $1.94 billion.

Net profit of SMIC rose 54.1 percent to $574.4 million, while gross profit increased 58.6 percent to $742.2 million.

SMIC said weak demand in the consumer market, coupled with new export controls from the United States would weigh on its fourth-quarter results.

The new rules will have an adverse impact on production and operations, and the company is working on clarifying certain definitions in the rules.

SMIC lifted its capital expansion plan for the year to $6.6 billion from $5 billion.

Backed by funding from Beijing, SMIC is China’s best hope for becoming a global leader in chip manufacturing that can rival Taiwan Semiconductor Manufacturing Corporation (TSMC), the industry’s largest foundry.

In early October, the U.S. department of commerce released a sweeping set of export controls aimed at containing advancement among China’s chip manufacturers.

The restrictions are further set to hamper SMIC’s ambitions for making advanced chips, experts say.

Chinese chip fab Hua Hong Semiconductor reported a 39.5 percent year-on-year rise in revenue to a record high of $629.9 million, while net profits were also up 83.7 percent.