Down 7percent! SMIC confirmed to be subject to us export control measures to deal with potential impact

category:Finance
 Down 7percent! SMIC confirmed to be subject to us export control measures to deal with potential impact


Photo source: company announcement

As of press release, the official website of the U.S. Department of commerce did not disclose the above restriction information.

SMIC said that the company and the U.S. industrial and security administration have conducted preliminary exchanges on export control, and the company will continue to actively communicate with relevant U.S. government departments. The company reiterated that it has always adhered to the compliance operation and abided by the relevant laws and regulations of the place of operation.

Analysts believe that export control will bring three impacts to SMIC. Firstly, SMIC will encounter obstacles in purchasing equipment materials and spare parts from the United States and some international companies, and even run out of stock; secondly, the cooperation between SMIC and American customers and some international customers will be seriously affected; thirdly, the cooperation between SMIC and the United States and some international partners will be hindered.

Affected by the news, SMIC Hong Kong shares opened at HK $17.60, down 2.87%. As of press release, it was down more than 7% in the session.

Source: wind

SMIC: assessing impact

SMIC said it was assessing the impact of the export restrictions on its production and operations. Due to the delay or uncertainty in the supply of some equipment, accessories and raw materials exported from the United States, it may have an important adverse impact on the companys future production and operation.

It is understood that the integrated circuit wafer foundry industry has high requirements for raw materials and equipment, and the number of qualified suppliers of some important raw materials and core equipment in the world is small, and most of them come from outside China, especially the United States.

For example, integrated circuit manufacturing four big pieces. In terms of lithography, ASML, a Dutch manufacturer, has a global market share of over 70%. In terms of etching machine, pan forest group, Tokyo electronics, applied materials and other international enterprises occupy the main global market share. In terms of film deposition equipment, PVD field is mainly monopolized by applied materials, evatec and avatech, of which application materials account for about 85%; global main suppliers of CVD field are applied materials, Tokyo electronics and Fanlin group, of which application materials account for about 30%. In the field of IC ion implanter, applied materials and Axcelis have gained most of the global market share, of which application materials account for more than 50% of the market share.

Equipment value accounts for more than 75% of the total investment in a production line to manufacture advanced semiconductor products. Therefore, affected by export control, SMICs international mature process capacity expansion plan and SMIC Southern phase II, which undertakes advanced process business, may be hindered. According to the announcement, SMIC and the Management Committee of Beijing Development Zone jointly signed and signed the cooperation framework agreement on July 31. The two sides will establish a joint venture to engage in development and operation, focusing on the production of 28nm and above integrated circuit projects. The first phase of the project is planned to invest 7.6 billion US dollars, about 53.1 billion yuan.

Export control u2260 entity list

It should be emphasized that SMIC is not directly included in the entity list, but export control. If you enter the list of entities, it means that you can no longer trade with US companies, while export control leaves the possibility of continuing transactions.

It is worth mentioning that in early September, in response to the issue of SMIC being sanctioned by the US, foreign ministry spokesman Zhao Lijian said that China has repeatedly expressed its solemn position on the issue of the US sides groundless suppression of Chinese enterprises. For some time, the United States, without any concrete evidence, has generalized the concept of national security, abused state power, and adopted various restrictive measures against Chinese enterprises. This is a naked act of hegemony. China firmly opposes this.

Multiple measures to deal with potential impact

Will US sanctions bring SMIC into a desperate situation or even stop? The answer is clearly no, according to the study. If the United States sanctions SMIC, SMICs business will be greatly affected, but SMIC will not be suspended. First of all, SMIC has been in operation for 20 years, with complete sets of equipment, mature processes, various technologies and diversified suppliers with a production capacity of several hundred thousand pieces per month.

Secondly, after the Huawei incident, SMIC has strengthened its bottom line thinking and made two-hand preparations for upstream and downstream industrial chains including equipment, spare parts, raw materials and international customers. For example, the reserve of raw materials is sufficient; the proportion of North American customers revenue is greatly reduced, and the proportion of domestic customers revenue is increased; the scientific and technological innovation board is listed, with more than 100 billion yuan of cash, which provides comprehensive logistics support for the winter and protracted war.

Benefited from the recovery of industrial chain, SMIC International Performance soared. According to international financial reporting standards, in the first half of the year, the companys operating revenue was about 1.843 billion US dollars, a record high, with a year-on-year increase of 26.3%; the net profit attributable to the parent company also reached a record high of US $202 million, with a year-on-year increase of 556.0%. Looking forward to the whole year, SMICs goal is to achieve double-digit revenue growth of 15% to 19%.

Self control is imperative

After the Huawei incident, there have been calls for the establishment of an independent and controllable IC industry chain, especially in the links of equipment and materials. Now, the most advanced Fab in Chinese mainland is also being eyed by the US side, which will undoubtedly strengthen this call.

At the second quarter conference call, Zhao Haijun, the joint chief executive of SMIC, said that local manufacturers of equipment, accessories and materials in China have been striving to develop, but the scale is still relatively small. Im glad to see that all the major companies have been listed on the stock market. They have got a lot of financial support and are also doing research and development. SMIC is optimistic about the future. They can build this integrated circuit system through close integration with customers and development, but it takes time and requires us to make a lot of innovation in R & D. What SMIC is doing now is to innovate with the industry. We will try to use domestic products, but SMIC is an international company. We dont have much tendency. We must only use Zhang San instead of Li Si. We just want to develop healthily in this industry. Industry followers can not replace the leaders in one day. We welcome foreign leading enterprises to set up factories and establish supply chains in local areas. This is an opportunity for all of us. At present, China has a layout in major semiconductor equipment fields, such as photolithography, etching machine, film deposition equipment, ion implantation equipment, heat treatment equipment, cleaning machine, polishing machine and other major semiconductor equipment fields in China. The manufacturers include Shanghai microelectronics, North Huachuang, Shenyang tuojing (a joint venture of Zhongwei company), kaishitong (holding subsidiary of Wanye enterprise), Zhongkexin (a unit of electrical equipment), and Shanghai Shengmei semiconductor, Huahai Qingke, etc. At this extraordinary time, the semiconductor industry, as an extraordinary industry, should have the thinking of entering a quasi wartime state, while the modern industry, as the mainstay of the industry, should be prepared for danger in times of safety to adapt to changes. Editor: Li Ruoyu, in response to the US export restrictions, extended reading just fell 60% at the opening! Alibaba will buy no more than 10% of the shares of duty-free retailer dufry. Japanese stock market is in a frenzy of speculation. Local bank shares of kan Yiwei economics soared and fell sharply. Source: China Securities Journal Author: Wu Keren, editor in charge: Zhong Qiming_ NF5619

At the second quarter conference call, Zhao Haijun, the joint chief executive of SMIC, said that local manufacturers of equipment, accessories and materials in China have been striving to develop, but the scale is still relatively small. Im glad to see that all the major companies have been listed on the stock market. They have got a lot of financial support and are also doing research and development. SMIC is optimistic about the future. They can build this integrated circuit system through close integration with customers and development, but it takes time and requires us to make a lot of innovation in R & D. What SMIC is doing now is to innovate with the industry. We will try to use domestic products, but SMIC is an international company. We dont have much tendency. We must only use Zhang San instead of Li Si. We just want to develop healthily in this industry. Industry followers can not replace the leaders in one day. We welcome foreign leading enterprises to set up factories and establish supply chains in local areas. This is an opportunity for all of us.

At present, China has a layout in major semiconductor equipment fields, such as photolithography, etching machine, film deposition equipment, ion implantation equipment, heat treatment equipment, cleaning machine, polishing machine and other major semiconductor equipment fields in China. The manufacturers include Shanghai microelectronics, North Huachuang, Shenyang tuojing (a joint venture of Zhongwei company), kaishitong (holding subsidiary of Wanye enterprise), Zhongkexin (a unit of electrical equipment), and Shanghai Shengmei semiconductor, Huahai Qingke, etc.

At this extraordinary time, the semiconductor industry, as an extraordinary industry, should have the thinking of entering a quasi wartime state, while the modern industry, as the mainstay of the industry, should be prepared for danger in times of safety to adapt to changes.

Editor: Li Ruoyu and Yu Hongbo

SMIC responds to us export restrictions