0981 · HKEX · China
smics.comFinancials as of FY2025
Manufactures computer chips inside China for Chinese chip designers who cannot use foreign factories.
What this company is and how it runs — written from structure, not news.
Semiconductor Manufacturing International Corporation takes chip designs from Chinese fabless companies like HiSilicon and Unisoc and manufactures them into finished wafers at its fabs in Shanghai, Beijing, and Tianjin, using ASML DUV lithography tools and Applied Materials equipment — the specific gear that U.S. export rules currently allow to enter China. Because those same rules block the EUV scanners needed to reach nodes below 14nm, SMIC cannot close that gap by spending more money; the ceiling is legal, not technical. Customers are nonetheless anchored to SMIC because any chip design qualified against its process recipes takes six to twelve months to re-qualify at an alternative foundry like TSMC, and Chinese government procurement policy adds regulatory pressure against routing that work abroad anyway. The whole structure balances on whichever tools the U.S. government currently permits to cross into China — if those controls extend to the DUV systems SMIC already operates, its fabs lose access to parts and support, the process recipes built around that equipment become unmaintainable, and the requalification friction that holds customers in place disappears with them.
How does this company make money?
SMIC charges customers a per-wafer fee that varies by how complex the process node is and how large each chip die is. Customers also pay separately for mask sets — the templates used to print circuit patterns — as well as for engineering support and packaging services. SMIC records that revenue when wafers are shipped and the customer confirms they have passed acceptance testing.
What makes this company hard to replace?
A chip that has been designed and tested against SMIC's specific process recipes and manufacturing rules takes six to twelve months to re-qualify at a different foundry — that is time a product cannot be in the market. On top of that, Chinese government procurement policies favor domestically made chips, which means customers seeking to move production to TSMC or a South Korean foundry face regulatory pressure as well as the requalification cost.
What limits this company?
The most advanced chips require a machine called an EUV scanner, which the U.S. government has banned from being shipped to any SMIC facility. Without EUV, SMIC must run its existing DUV machines through extra patterning steps to attempt finer circuits — but each extra step eats up machine time and causes more wafers to fail. No amount of spending fixes this, because the tool needed to fix it is legally blocked from arriving.
What does this company depend on?
SMIC cannot run without ASML DUV lithography systems for its 28nm and mature-node production lines. It also relies on Applied Materials and Lam Research for etching and deposition tools, which currently enter China under export licenses. Synopsys and Cadence supply the software used to verify that chip designs match SMIC's manufacturing rules. Silicon wafers come from Shin-Etsu and SUMCO in Japan. For some customer products, Taiwan Semiconductor Manufacturing Company handles advanced packaging steps that SMIC does not perform itself.
Who depends on this company?
Chinese fabless chip companies like HiSilicon and Unisoc would lose their only large-scale domestic manufacturing option for telecommunications and consumer chips if SMIC stopped operating. Automotive electronics makers in China would face shortages of power management and sensor chips used in vehicles. Chinese government agencies and state-owned enterprises would no longer be able to source domestically manufactured chips for infrastructure projects.
How does this company scale?
Adding capacity at established process nodes — 28nm and older — is straightforward: SMIC builds another fab hall and installs more of the same permitted equipment. That part scales with money. What does not scale is moving to more advanced nodes below 14nm, because doing so requires EUV scanners and the decades of process knowledge built around them, and both are currently out of reach.
What external forces can significantly affect this company?
U.S.-China trade tensions drive periodic tightening of export controls on semiconductor equipment and materials, and any new restriction can remove tools or supplies SMIC currently depends on. The Chinese government's National IC Industry Investment Fund pushes SMIC to hit self-sufficiency targets that its legally constrained equipment base may not be able to meet. When the yuan weakens against the dollar, the cost of importing manufacturing equipment — priced in foreign currency — rises, squeezing margins.
Where is this company structurally vulnerable?
If the U.S. government extended its export controls to cover the DUV lithography machines and Applied Materials process tools that SMIC already owns and runs, equipment suppliers would be forced to stop delivering spare parts and software updates to all three fabs at once. Without support, those machines degrade. Once the machines stop working reliably, the process recipes built around them cannot be maintained — and the switching friction that keeps customers tied to SMIC disappears with them.
Price is read as structure — trend, levels, range, peak and volatility drawn on the chart. It does not predict where price goes next.
Sign in to view price data.
Sign inThe reported statements, read against the company's own industry.
Shared structure with peers — never a ranking.
Structural observations derived from financial data, industry benchmarks, and supply chain position.
Companies that share the same coordination system — how they create, deliver, or capture value.
CompanyGraph