SMIC International: The new production capacity and technical nodes fully comply with relevant regulations
Nov 12,2022
On the morning of November 11, Zhao Haijun, CEO of SMIC International, analyzed the financial report performance from the macro environment, industrial cycle and other aspects at the third quarter performance briefing, and answered the questions about the cooperation between SMIC International and overseas companies, the impact of the new US export control regulations on the company and so on.
In the second half of 2022, from the perspective of the macro environment, the global industrial chain and regional industrial chain are subject to varying degrees of changes and challenges in business formats, the industrial division system and layout are undergoing profound adjustment, the original global industrial chain cycle is disrupted, or even blocked, and the regionalization process is advancing in difficulties and twists.
Zhao Haijun pointed out that, from the perspective of the industrial cycle, the inventory of smartphones and consumer electronics is slowly removed, and the customers are not willing to film. Although the industrial control field is relatively stable, the growth rate is limited. The automotive terminal consumption is strong, and there is still a demand gap in the industry. Zhao Haijun believes that although the overall mobile phone industry is still destocking, thanks to the company's direct communication with end customers, the company has adjusted its capacity allocation in advance since last year, reducing the capacity arrangement in the relatively saturated subdivisions, so the revenue contribution of smart phones increased slightly in the third quarter month on month, the overall demand for consumer electronics was weak, and the revenue fell 4% month on month.
When a questioner asked about overseas customers' demand for SMIC's capacity, Zhao Haijun said that overseas companies tend to get long-term commitment from Chinese manufacturers to allocate capacity to ensure supply security. He explained that under the influence of the experience of oversupply in various industries last year, today's overseas customers will maintain a certain proportion of products produced in Chinese companies. In order to ensure the safety of the industrial chain, they formed a strategic alliance with SMIC International to obtain long-term commitment on capacity allocation. He said that SMIC's cooperation with overseas customers was very fast.
In addition to industry cycle factors, Zhao Haijun also mentioned that according to the preliminary interpretation, SMIC's customers' production capacity and technology nodes fully comply with the new regulations of the United States. He explained that the new regulations of the United States are mainly aimed at the production of American design companies in China, and the new capacity and technology nodes we are now adding are fully in line with relevant regulations. However, some customers need a buffer time to interpret the new US export control regulations. The company keeps close communication with customers and suppliers, clarifies some concepts in the new regulations, and evaluates the impact on the company.
In the second half of 2022, from the perspective of the macro environment, the global industrial chain and regional industrial chain are subject to varying degrees of changes and challenges in business formats, the industrial division system and layout are undergoing profound adjustment, the original global industrial chain cycle is disrupted, or even blocked, and the regionalization process is advancing in difficulties and twists.
Zhao Haijun pointed out that, from the perspective of the industrial cycle, the inventory of smartphones and consumer electronics is slowly removed, and the customers are not willing to film. Although the industrial control field is relatively stable, the growth rate is limited. The automotive terminal consumption is strong, and there is still a demand gap in the industry. Zhao Haijun believes that although the overall mobile phone industry is still destocking, thanks to the company's direct communication with end customers, the company has adjusted its capacity allocation in advance since last year, reducing the capacity arrangement in the relatively saturated subdivisions, so the revenue contribution of smart phones increased slightly in the third quarter month on month, the overall demand for consumer electronics was weak, and the revenue fell 4% month on month.
When a questioner asked about overseas customers' demand for SMIC's capacity, Zhao Haijun said that overseas companies tend to get long-term commitment from Chinese manufacturers to allocate capacity to ensure supply security. He explained that under the influence of the experience of oversupply in various industries last year, today's overseas customers will maintain a certain proportion of products produced in Chinese companies. In order to ensure the safety of the industrial chain, they formed a strategic alliance with SMIC International to obtain long-term commitment on capacity allocation. He said that SMIC's cooperation with overseas customers was very fast.
In addition to industry cycle factors, Zhao Haijun also mentioned that according to the preliminary interpretation, SMIC's customers' production capacity and technology nodes fully comply with the new regulations of the United States. He explained that the new regulations of the United States are mainly aimed at the production of American design companies in China, and the new capacity and technology nodes we are now adding are fully in line with relevant regulations. However, some customers need a buffer time to interpret the new US export control regulations. The company keeps close communication with customers and suppliers, clarifies some concepts in the new regulations, and evaluates the impact on the company.