SMIC Announcement: Jiang Shangyi Resigns as Vice Chairman, Liang Mengsong Resigns as Executive Director

Latest update time：2021-11-12 11:22

Reads：

Last night, SMIC issued an announcement that Jiang Shangyi will resign as vice president.

The announcement stated that Dr. Jiang Shangyi resigned as the company's vice chairman, executive director and member of the board's strategic committee because he wanted to spend more time with his family, effective November 11, 2021.

At the same time, Dr. Liang Mong-song, Executive Director and Co-CEO of SMIC, resigned from the position of Executive Director in order to focus on fulfilling his duties as Co-CEO of the Company, effective November 11, 2021. Dr. Liang will continue to serve as Co-CEO of the Company after his resignation from the above positions.

Due to work needs, Mr. Zhou Jie resigned from the positions of non-executive director, member of the Board's Remuneration Committee and member of the Board's Audit Committee, effective from November 11, 2021.

In order to focus on other businesses, Dr. Guanglei Yang has resigned as an independent non-executive director and member of the Remuneration Committee, effective November 11, 2021.

The announcement also pointed out that SMIC will appoint independent non-executive directors Mr. Fan Renda and Dr. Liu Ming as members of the Remuneration Committee, effective November 11, 2021.

2021 Q3 financial report: revenue increased by 30.7% year-on-year , gross profit margin was 33.1%

In the third quarter of 2021, SMIC's sales revenue and gross profit margin both hit new highs. Sales revenue was US$1.415 billion, a month-on-month increase of 5.3% and a year-on-year increase of 30.7%; the gross profit margin was 33.1%, a month-on-month increase of 3.0 percentage points and a year-on-year increase of 8.9 percentage points.

The company will continue to maintain its growth momentum in the fourth quarter, with sales revenue expected to increase by 11% to 13% month-on-month and gross profit margin expected to be between 33% and 35%. Based on the performance of the first three quarters and the fourth quarter guidance, the company's full-year sales revenue growth target has been further raised to around 39%, and the gross profit margin target remains at around 30%.

SMIC management commented: "Since SMIC was included in the 'Entity List' by the United States, the company's production and operations have faced huge challenges. Since the beginning of the year, we have focused on ensuring production continuity and continuous capacity expansion. We have reorganized the supply chain and tried every means to optimize procurement processes, speed up supplier verification, and improve production planning and engineering management. At present, production continuity has been basically stable, mature process expansion has been carried out in an orderly manner, and the overall expansion progress has been achieved as scheduled; advanced process business has also steadily improved. Starting from the second quarter, in response to the problem of tight production capacity, we have further clarified the capacity allocation strategy, orderly allocated capacity, optimized production scheduling to support the needs of our customers, looked at the actual terminal demand from the perspective of the whole machine factory, and made the company's utmost efforts to solve the problem of customer chip shortages.

Looking ahead to next year, SMIC believes that the overall market sentiment will remain positive, and the company's production capacity is expected to continue to be unable to meet customer demand throughout next year. Based on this year's rapid growth, the company's revenue growth next year is expected to be no lower than the industry average.

SMIC's large-scale expansion

Under the theme of global chip shortage, SMIC has carried out several large-scale expansions of production.

At the end of July 2020, SMIC and the Beijing Economic and Technological Development Zone Management Committee signed a "Cooperation Framework Agreement" to establish a joint venture to develop and operate projects focusing on the production of 28-nanometer and above integrated circuits. The first phase of the project plans to invest US$7.6 billion and eventually achieve a monthly production capacity of about 100,000 12-inch wafers.

On March 12, 2021, SMIC signed a cooperation framework agreement with the Shenzhen Municipal People's Government ("Shenzhen Municipal Government"). Pursuant to the agreement, SMIC and the Shenzhen Municipal Government (through Shenzhen Major Industrial Investment Group Co., Ltd. ("Shenzhen Major Investment Group")) intend to carry out project development and operation through SMIC Shenzhen in the form of a proposed investment, focusing on the production of 28 nanometers and above integrated circuits and providing technical services, and production is expected to begin in 2022. The new investment in the project is estimated to be US$2.35 billion.

In October, the Shenzhen Pingshan District Investment Promotion Service Bureau issued a "Notice on the Selection Scheme for the Supporting Plant Project for the 12-inch Wafer Foundry Production Line". The notice showed that the intended land user of the project is Semiconductor Manufacturing International Corporation (Shenzhen) Co., Ltd., which will build supporting facilities such as bulk gas stations and chemical warehouses required for the 12-inch wafer foundry production line, with a total construction area of approximately 69,410 square meters (subject to the land transfer contract). It is reported that the project's products are positioned in 12-inch 28nm and above line width display driver chips and power management chips, etc. The industry type, construction content, and development prospects are highly consistent with the positioning and planning of Shenzhen Pingshan District.

*Disclaimer: This article is originally written by the author. The content of the article is the author's personal opinion. Semiconductor Industry Observer reprints it only to convey a different point of view. It does not mean that Semiconductor Industry Observer agrees or supports this point of view. If you have any objections, please contact Semiconductor Industry Observer.

Today is the 2856th content shared by "Semiconductor Industry Observer" for you, welcome to follow.