US Tech Curbs Could Halve Growth of China’s Top Chipmaker
(Bloomberg) -- US restrictions on China’s access to advanced American technologies could slash growth of the country’s largest chipmaker by half next year, Bloomberg Intelligence estimates.
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Semiconductor Manufacturing International Corp. could see 2023 sales growth 50% lower than he previously expected, as the latest export curbs hamper its capacity buildup, analyst Charles Shum wrote on Monday. Roughly 48% of SMIC’s capacity to be installed by next year will require gear from US tool makers such as Lam Research Corp. and Applied Materials Inc., he said.
The estimate is based on Shum’s calculations of SMIC’s affected capacity and don’t include the impact of price fluctuations or utilization levels. China’s largest contract chip manufacturer by sales had been projected to grow overall revenue more than 38% in 2022 and about 5% in 2023, according to data compiled by Bloomberg. Its shares fell as much as 5.2% in Hong Kong on Monday.
What Bloomberg Intelligence Says
SMIC’s revenue could grow at a 50% slower pace vs. our expectations in 2023 on the US’s stricter equipment export license requirements, as 48% of its new capacity to be installed by next year is in 28- or smaller nanometer node advanced chip manufacturing, we calculate. This would require supplies from US tool makers such as Lam Research and Applied Materials.
- Charles Shum, analyst
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The Biden administration announced a set of restrictions last week aimed at stopping China from developing home-grown semiconductor capability. The measures include restrictions on the export of some types of chips used in artificial intelligence and supercomputing, and also tighten rules on the sale of semiconductor manufacturing equipment to any Chinese company.
Shanghai-based SMIC had already been blacklisted by the US. The company declared breakthroughs in 7-nanometer chipsets this year, the most advanced node for China, Bloomberg News reported in July.
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