China’s top chipmaker’s profits soar despite US sanctions

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China’s largest chipmaker, Semiconductor Manufacturing International Corporation (SMIC), has reported record revenue and a surge in profit last year amid a global chip shortage and strong demand. According to its annual financial report published on Thursday, sales for calendar 2021 were up 39% on the year, at a record $5.4 billion.

Profit from operations for the year stood at $1.4 billion, which is a roughly four-fold increase from 2020.

That record performance came despite SMIC being hit with US sanctions, which the company said has had a major impact on its advanced technology development.

“The global shortage of chips and the strong demand for local and indigenous manufacturing brought the Company a rare opportunity, while the restrictions of the ‘Entity List’ set many obstacles to the Company’s development,” the chipmaker said in a statement.

SMIC is a competitor to the likes of Taiwan’s TSMC and South Korea’s Samsung, but the Chinese firm’s technology is several generations behind.

The world’s two largest economies, US and China, have been racing to dominate in key technologies, including semiconductors. China is significantly behind the United States in chip development, with SMIC aiming to wean itself off foreign technology.

Governments across the world are making efforts to bolster domestic chip production, after a global component shortage hurt the auto and electronics industries.

For more stories on economy & finance visit RT’s business section

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