China’s prime chipmaker SMIC says smartphone, PC demand has ‘dropped like a rock’

SHANGHAI : China’s prime chipmaker Semiconductor Manufacturing Worldwide Corp mentioned on Friday it anticipates smartphone gross sales from its shoppers this 12 months to fall by no less than 200 million items as a result of Russia-Ukraine warfare and China’s COVID lockdowns.

Whereas SMIC beforehand had points fulfilling orders as a consequence of excessive demand amid a worldwide chip scarcity, prospects from the smartphone, private laptop and family equipment sectors have been now cancelling orders as a consequence of these two occasions, CEO Zhao Haijun advised analysts after the corporate’s quarterly outcomes.

Demand for such merchandise “dropped like a rock” as gross sales in Russia and Ukraine have been closely impacted whereas China’s COVID lockdowns meant that corporations had hassle delivering merchandise or needed to shut shops, he mentioned.

“This 12 months we count on (demand for) smartphones to fall by no less than 200 million items, and nearly all of these 200 million are from our home Chinese language cellphone makers. So many orders have been cancelled.”

This meant that the proportion of SMIC’s manufacturing capability devoted to smartphones and such merchandise had fallen to 29 per cent, he mentioned, from round 50 per cent beforehand.

His feedback present a glimpse into how Russia’s invasion of Ukraine and China’s makes an attempt to stamp out COVID are impacting each world provide chains in addition to client demand. SMIC, which has factories in Shanghai, has managed to maintain these open by way of town’s lockdown through closed loop administration.

SMIC posted a 66.9 per cent bounce in first quarter income and mentioned web revenue rose 181.5 per cent to $447.2 million.

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