With a full 170 billion yuan, SMIC is going to do a big thing! But the reality is like a basin of cold water, and the net profit has plummeted by 78%, what is going on?
In the third quarter of 2023, their wallets have deflated a lot, and their revenue has also shrunk. People outside are guessing that Huawei's Kirin chip may not have been made by them. The story here is not simple, there is a contest of technology, and there is an impact on international politics. SMIC's future path, as well as the challenges and opportunities of China's semiconductor industry, are all in this article.
SMIC, China's largest chip foundry, holds the hope of China's semiconductor industry. They said, "We're going to invest 170 billion!" That's not a small amount, and that's a lot of faith and determination. In the third quarter of 2023, when they were looking forward to it, the situation took a sharp turn for the worse.
Let's talk about revenue first, compared with the same period of the previous year, it directly decreased by 10.6%. The most staggering thing was net profit, which fell by 78.4%. This decline has to make people wonder, where has all this money been invested? Is it a bottomless pit? SMIC is facing many problems.
SMIC is in a hurry, the market competition is becoming more and more fierce, and they have to have new ways to deal with this serious challenge. Huawei's Kirin chip, that's a hot baby, the whole world is staring at it. But there are rumors that the Kirin chip may not be made by SMIC. Because the United States has imposed sanctions on Huawei, Huawei may have to find a new partner.
In recent years, China's semiconductor industry has been riding the wind and waves. In the face of the international technological blockade, they were not only not intimidated, but seized the opportunity to show their skills. Although the road is full of thorns, they show potential that should not be underestimated. From design to manufacturing, China's semiconductor industry is breaking down technical barriers step by step and showing its muscles and wisdom to the world.
In this race in the semiconductor field, SMIC undoubtedly plays a key role. Their actions, every step of investment, touches the nerves of the market. This investment of 170 billion yuan was supposed to be an opportunity to show muscles, but who would have thought that it would become a heavy burden.
The net profit of 78.4% fell by 78.4%, which can be shocking. But you must know that making money is never a simple matter of mathematical addition and subtraction. There are so many reasons behind it, it's like a complicated chess game. For example, changes in market demand or shocks in the global economic situation are unpredictable variables.
The technological upgrading of the semiconductor industry is dizzyingly fast. Today's advanced technology may become obsolete tomorrow. The core equipment of lithography machine is priceless, but it is also frighteningly expensive. If SMIC wants to stay ahead of the competition, it will have to keep investing, but it also means huge costs and risks.
Huawei, for example, has been the flagship of China's high-tech companies, but it now faces tough sanctions from the United States. The Kirin chip, as the heart of Huawei's mobile phone, is really not made by SMIC, then the story behind this is even more complicated. This is not just because of technical difficulties, but more likely because of various political and market factors that have to be taken into account.
SMIC's predicament seems understandable. In this high-speed world, it's not just about running fast, it's about running steadily. SMIC has to consider how to make breakthroughs in technology while dealing with the dual challenges of the market and political environment.
What we can see is a test of courage, wisdom and endurance. Every step of the way is paving the way for the future of China's semiconductor industry. Although the road is bumpy now, it is precisely this challenge that can test the true strength of an enterprise and even a country.
SMIC is now at a critical turning point. Their strategies and decisions will determine the fate of themselves and the entire Chinese semiconductor industry. This game is far from over, but has entered a new and more complex stage. At this stage, every decision can become a turning point in history.