The two CEOs of SMIC have a disagreement: profit or advanced technology is more important

According to the Financial Times, SMIC's co-CEOs Dr. Zhao Haijun and Dr. Liang Mengsong have had differences in business strategy, and Dr. Zhao Haijun is considering leaving the company.

       Previously, according to EE Times, Tsinghua Unigroup intended to poach Zhao Haijun from SMIC to lead a new DRAM factory, but this was later denied by SMIC.

      Currently, the focus of the disagreement between the two CEOs of SMIC is whether SMIC should build profitable businesses or focus on cutting-edge technologies.

      The Financial Times reported that according to seven people familiar with the matter, "SMIC is more focused on developing more advanced 14nm and smaller processes, and this work currently takes precedence over Zhao Haijun's efforts to expand commercially viable businesses using older generation process technologies."

      Another person who is close to Zhao Haijun said, "He wanted to leave because SMIC is more inclined to advanced processes, and the country is vigorously promoting the focus on cutting-edge technology. Liang Mengsong is irreplaceable."

      An executive who recently left SMIC said that as Liang is free to hire people who focus on cutting-edge technology development, some management teams may be swept out. "There is a large-scale purge going on now," said an executive at a supplier to SMIC. "Zhao and Liang have been fighting for a while, and Liang has the upper hand now."

      A person familiar with SMIC said that China's goal of mastering the 14-nanometer chip manufacturing process by 2020 has actually made much faster progress than expected, and "the government may fully support Liang Mengsong."

      SMIC did not comment on this. However, a company spokesperson said: "The rumor is false."

      According to a previous report by Jiwei.com, SMIC's total revenue in the first quarter was US$668.9 million, down 19.5% from US$831.0 million in the same period last year. However, Zhao Haijun said that the first quarter was the lowest revenue period this year, and the industry inventory cycle adjustment has ended. It is expected that the revenue in the second quarter will increase by 17% to 19% month-on-month. Liang Mengsong pointed out that SMIC's FinFET research and development progress is encouraging, and the current 12nm process development has entered the customer introduction stage.

      On May 9, Zhao Haijun and Liang Mengsong attended the first quarter earnings analysis conference call. Zhao Haijun pointed out that SMIC will continue to improve its business efficiency and make it more cost-effective and competitive. He also emphasized that the company had previously grown in the field of professional chips and had a "solid customer base and reasonable demand."

      Analysts said that SMIC had previously successfully won customers with relatively mature technology, but it was difficult to improve profitability. Some industry experts believe that although SMIC has made great progress in the 14nm process, it is difficult to commercialize it because customers prefer to use TSMC's 14nm process.

      It is understood that SMIC's 14nm process entered the customer introduction stage in August last year, entered the customer verification stage in February this year, and is expected to be put into mass production in June this year.