Asia Chip Foundry

It Is Not Just About Money

Published August 24, 2020

Download the report

“By completing this form you agree to the processing of your personal information submitted through this form in accordance with CFRA’s Privacy Notice located at and the receipt of communications about CFRA and CFRA’s services.”

Key Takeaways


  • SMIC has received multiple financial boosts, including a tax break and capital injections, since the U.S. imposed chip supply restrictions to Huawei on May 15. CFRA thinks that SMIC is key to China’s aim for semiconductor self-sufficiency, which requires SMIC to be the leader in terms of chip processing technology. 

  • However, even with significant financial support, the technology gap between  SMIC and the global foundry industry leader TSMC is too wide to be closed within the next five years. in CFRA’s view. The chip supply restriction to Huawei also affects SMIC as well as TSMC.

  • Hence, SMIC is likely to remain behind TSMC in terms of chip processing technology, overall pricing power, and profitability at least in the next five years.




Please visit our website for more examples of CFRA's fundamental research.