Following multiple rounds of restrictions imposed on semiconductor production equipment sales to China, the country's foundry champion, Semiconductor Manufacturing International Corporation (SMIC), is finally feeling the effects. This week, the company reported output disruptions caused by equipment maintenance and new equipment validation, which will reduce its revenues for the second quarter by up to 6%, according to DigiTimes.
SMIC ran into two yield and output-related issues recently. An unexpected incident during scheduled annual maintenance disrupted production lines and compromised process accuracy, leading to a drop in yield rates. On top of that, the validation of newly installed equipment uncovered performance issues that needed correction, causing additional yield fluctuations. These issues lasted for more than a month during the first quarter and are expected to affect output in the second quarter. SMIC co-CEO Haijun Zhao explicitly said average selling prices (ASPs) were stable, confirming that the revenue shortfall was not pricing-related — it was from lower sellable output due to yield loss.
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