SMIC’s Hong Kong-listed shares closed 2.99 per cent lower to HK$15.60 on Wednesday.
Semiconductor Manufacturing International Corp in February reported total 2023 revenue of US$6.32 billion, down 13.1 per cent from a year earlier, owing to weak global demand. Photo: Shutterstock
Counterpoint’s latest foundry tracker report said the sector had a 5 per cent quarter-on-quarter revenue decline in the first three months of the year because of a slower recovery in demand for non-artificial intelligence (AI) semiconductors, such as those used on smartphones, Internet-of-Things devices, and automotive and industrial applications.
“We’ve observed more evidence to support that the AI demand is real, with increasing [capital expenditure] by cloud service providers adopting AI hardware first and followed by enterprises,” Counterpoint analyst Adam Chang said.
The demand for AI chips is predicted to remain strong this year and is likely to extend to 2025, while non-AI semiconductor demand remains sluggish, he said.
Global AI chip market leader Nvidia, for example, said its revenue from supplying graphics processing units (GPUs) to data centres jumped more than 400 per cent to US$22.6 billion in the quarter ended April 28, according to the US firm’s latest financial results published on Wednesday.
Nvidia has more than 80 per cent share of the world’s AI accelerator chip market, according to a separate report from Taiwan IC research firm TrendForce. It projected TSMC to raise its total monthly advanced packaging capacity by 150 per cent at the end of this year to accommodate Nvidia’s next-generation Blackwell line of GPUs – the B100, B200 and GB200.
An ASML assembly line engineer works on a Twinscan deep ultraviolet lithography system at the company’s headquarters in Veldhoven, the Netherlands, on June 16, 2023. Photo: Reuters
On the impact to SMIC of being potentially cut off from services by Dutch chip-making equipment supplier ASML, Counterpoint associate director Brady Wang said: “Although this is a hypothetical scenario, the impact will be tangible.”
“The extent and duration of this impact will hinge significantly on the available inventory of repair parts,” Wang said. “If the inventory levels are high, the negative effects might be mitigated more swiftly, whereas lower inventory could prolong and intensify these effects, potentially leading to more significant disruptions in service or operations.”
