The top chipmaker in China, SMIC (Semiconductor Manufacturing International Corp) has stated that it believes that ongoing global issues such as the Russian invasion of Ukraine and the COVID lockdowns in China will cause smartphone sales from it’s clients to fall by at least 200 million.
In a massive turnaround from being unable to meet demand during the global chip shortage, SMIC CEO Zhao Haijun has said that customers in the smartphone, PC and household appliance sectors have begun to cancel their orders.
“This year we expect (demand for) smartphones to fall by at least 200 million units, and the majority of these 200 million are from our domestic Chinese phone makers. So many orders have been cancelled.”
Reflecting the ongoing invasion Ukraine by Russia, as well as COVID lockdowns in China meaning companies had issues delivering products, demand for technology has “dropped like a rock”.
Based on Haijun’s comments, the two issues are burning the market at both ends, with both supply and demand taking a hit.
Previously, SMIC’s dedicated manufacturing capacity for the affected tech sectors sat at around 50%, but has since dropped to 29%.
The company was able to avoid lockdowns of their Shanghai factories with closed loop management. During the first quarter, SMIC reported a 66.9% jump in revenue whilst net profit rose 181.5% to $447.2 million USD.
