Last Friday, China Semiconductor Manufacturing International Corporation (SMIC) was unable to meet customers’ needs for certain mature technologies, and its factories have been “operating at full capacity” for several quarters.

Zhao Haijun, the co-CEO of China’s largest chip manufacturer, made the comments in a conference call after the release of the latest quarterly results. He also said that external sanctions will continue to affect the company’s revenue growth.

SMIC is a key force in China’s efforts to improve its domestic semiconductor manufacturing capabilities, but the sanctions imposed by the former Trump administration restricted US companies from supplying it.

The company is also an important participant in the global semiconductor supply chain. Because the pandemic ban has promoted the demand for electronic products such as notebook computers and mobile phones, the global semiconductor supply chain is under tremendous pressure.

In particular, global automakers were caught off guard by the shortage of chips. Companies from General Motors to Stellattis announced that they had slowed down production and laid off thousands of workers.

In more chip-related news, Qualcomm, the world’s largest smartphone chip maker, warned that it is struggling to meet demand, indicating that the global semiconductor shortage is spreading.

The incoming CEO Cristiano Amon said: “There is a widespread shortage in the semiconductor industry.”

Like most chip manufacturers, Qualcomm outsources production to companies such as TSMC and Samsung Electronics. These suppliers are working hard, but so far have not been able to adapt to the strong rebound in demand. The auto industry has recently expressed its complaints, but Qualcomm’s comments indicate that the problem is broader.

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When the COVID-19 pandemic first broke out in early 2020, chip orders initially collapsed. However, remote work and learning have stimulated the demand for computers, and as people avoid public transportation, car purchases have surged. In turn, this has led to increased purchases of chips by car and electronics manufacturers.

Amon said orders for chips used to run computers, cars, and many other Internet-connected devices are flooding the entire industry, which relies mainly on a few factories in Asia. He added that supply will improve in the second half of 2021.


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