Shanghai-based Semiconductor Manufacturing International Corp. (SMIC) is the second-largest pure-play foundry in the world after TSMC, and its stock price has been going on a rally in the past two months, doubling its value. Bloomberg says that China’s push for semiconductor self-reliance fuels this demand, and with U.S. sanctions making it harder for local companies to acquire chips with Western parts, they’re turning to local companies like SMIC for their needs. Aside from this, China is also investing billions of dollars into its semiconductor industry, and SMIC is benefiting from it.
However, despite its burgeoning semiconductor manufacturing industry, China still lags behind the Western world in cutting-edge chips and AI, primarily due to Washington’s moves. For example, it cannot access ASML’s latest High-NA EUV machines, preventing Chinese firms from producing the nodes required for next-generation processors. And despite SMIC’s focus on legacy chips used in industrial processes and automobiles, a move that a Chinese chip industry leader recommended, some experts say competition in this space may get fiercer next year, as other local chip fabs, and even TSMC, could lower their prices, making their offerings more attractive to customers and reducing SMIC’s advantage.
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