SMIC Management Shakeup Continues

Article By : Alan Patterson

Domestic chip demand remains strong, but tensions persist over technology access.

Semiconductor Manufacturing International Corp. (SMIC) announced several board-level resignations even as business for China’s biggest chip maker soars.

Industry veteran Chiang Shang-Yi resigned as vice chairman, executive director and a member of the strategic committee, effective from Nov. 11, SMIC said in a statement on its website. Liang Mong Song, an executive director and co-CEO, has resigned as executive director with effect from the same day in order to focus on continuing his role at the company, SMIC said.

The company is no stranger to top-level shakeups in recent years. In December 2020, the Shanghai-based chip maker appointed Chiang to the same positions from which eleven months later he has resigned — executive director, vice chairman and member of the strategic committee. SMIC indicated last December that co-CEO Liang might resign.

Chiang and Liang are former senior employees of Taiwan Semiconductor Manufacturing Co. (TSMC), which dominates the chip foundry industry where smaller rival SMIC competes. Chiang, who was in charge of TSMC’s R&D in the early 2000’s, retired from TSMC to support China’s chip startups.

Chiang left one such startup, Wuhan Hongxin Semiconductor Manufacturing Co. (HSMC), in late 2020 after the company ran out of cash. HSMC’s $20 billion chip project in Wuhan, in the midst of the global pandemic, fell victim to the viral outbreak as well as funding shortages.

Liang, a former senior director of R&D under Chiang at TSMC, joined SMIC as co-CEO in 2017. Liang was previously found guilty of illegally transferring chip technology from TSMC to Samsung, helping the South Korean chipmaker narrow the technology gap with TSMC.

SMIC said two non-executive members of the board, Zhou Jie and Young Kwang Leei, also resigned. SMIC also appointed three new members to its board.

Strong demand

SMIC’s business is growing despite sanctions placed on it by the Trump administration. Domestic demand remains strong as China pours vast sums into semiconductor development.

Revenue for SMIC’s recently ended financial quarter reached a record high, growing 30.7percent from a year ago.

“Since SMIC was placed on the Entity List by the U.S., the company has faced tremendous challenges in production and operations,” the company acknowledged on its website.

The chipmaker said its priorities since the beginning of 2021 include “ensuring operation continuity and continuous capacity expansion, realigning the supply chain and finding ways to optimize the procurement process, accelerate supplier qualification and improve production planning and engineering management.”

The expansion of mature technology is progressing as expected, and its advanced technology business is steadily improving, according to SMIC. Responding to capacity constraints, SMIC has since the second quarter redefined its allocation based on “actual end demand”, the company said.

In 2022, SMIC said it expects continuing market expansion despite lingering capacity shortages.

The predictions come against the backdrop of a China-U.S. technology dispute that could spawn separate electronics supply chains.

The U.S. government has prevented SMIC from importing extreme ultraviolet lithography equipment crucial for manufacturing chips at the 7-nm or lower process nodes. In addition to SMIC, the U.S. has placed Huawei on its Entity List, effectively cutting off the Chinese telecommunications equipment giant’s access to TSMC’s chip technologies at or below 7 nm.

This article was originally published on EE Times.

Alan has worked as an electronics journalist in Asia for most of his career. In addition to EE Times, he has been a reporter and an editor for Bloomberg News and Dow Jones Newswires. He has lived for more than 30 years in Hong Kong and Taipei and has covered tech companies in the greater China region during that time.

 

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