Sat, Nov 13, 2021 page10

• SMIC loses second senior executive

  TURBULENT YEAR: The short tenure of vice chairman Chiang Shang-yi, a former TSMC executive, ended after another SMIC official last year threatened to resign over his role

  • Bloomberg
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  Semiconductor Manufacturing International Corp (SMIC, 中芯) vice chairman Chiang Shang-yi (蔣尚義) has resigned less than a year after joining the company, China’s biggest chipmaker said on Thursday.

  It is the second departure of a senior executive at the Shanghai-based firm in two months.

  Chiang, who is in his mid-70s, has left SMIC to spend more time with his family, the company said in a filing.

  The chip industry veteran joined SMIC in December last year, after having helped to turn Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) into the world’s most influential contract chip manufacturer more than a decade ago.

  SMIC shares dropped as much as 4.5 percent in Hong Kong yesterday.

  Alongside Chiang’s departure, SMIC also reported that revenue climbed 31 percent to US$1.42 billion in the third quarter this year, compared with the US$1.39 billion average of analysts’ forecast.

  Profit was US$321.4 million in the same period, the company said in a separate filing, also beating estimates.

  The resignation marks the latest management upheaval at SMIC, which is considered Beijing’s best hope at making advanced chips to counter sanctions by the US.

  In September, SMIC chairman Zhou Zixue (周子學) stepped down for health reasons, while cochief executive officer Liang Mong-song (梁孟松) threatened to quit late last year after learning that Chiang would join as vice chairman.

  Liang and Chiang are among the sector’s top developers, but stand for different technology paths.

  Liang later stayed after rounds of negotiations.

  He is stepping down as an executive director, but would continue to serve as cochief executive officer, SMIC said.

  Before joining the chipmaker, Chiang ran Wuhan-based Hongxin Semiconductor Manufacturing Co (武漢弘芯), a Chinese government-backed chipmaker.

  He left after the company ran into funding troubles.

  To satisfy China’s demand for home-made chips, SMIC has been expanding its capacity with a new US$8.87 billion plant in Shanghai, as well as a US$2.35 billion factory in Shenzhen.

  It is the most capable chipmaker in China in terms of capacity and technical know-how, but the company has been unable to buy key machinery from overseas suppliers including ASML Holding NV after it was blacklisted by the administration of former US president Donald Trump.

  SMIC is working hard to resolve shortages, executives said on a conference call on Friday.

  Some license approvals have been delayed, but the company is making sure expansions are on schedule, they said.

  The company is trying to accelerate the licensing approval process so it can have equipment for output expansion, which would triple its capacity in the coming years, SMIC cochief executive officer Zhao Haijun (趙海軍) added.

  “We will make every effort to work with suppliers to speed up procurement, delivery,” Zhao said.

  Revenue for the fourth quarter would increase 11 to 13 percent from the previous three months, with gross margin of as much as 35 percent, the chipmaker said.

  It boosted its full-year sales growth target to about 39 percent, or 29 percent based on Chinese accounting standards.

  Demand would continue to outpace supply throughout next year, and the company expects to grow no less than the industry average, Zhao said.
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