China's SMIC says Trump tariffs did not cause expected 'hard landing'
Zhao Haijun, co-CEO of Semiconductor Manufacturing International Corp (SMIC), told a post-earnings call that the company is not consulting with customers regarding US President Donald Trump's 100 per cent tariff plan on chip imports but expects the impact could be smaller due to contingency plans that had been made after tariffs were announced in April.
China raised additional duties on US goods to 125 per cent in April after Trump effectively raised tariffs on Chinese goods to 145 per cent. Trump said on Wednesday the United States will impose a tariff of about 100 per cent on imports of semiconductors, although that will not apply to companies that are manufacturing in the US or have committed to do so.
SMIC was blacklisted by the US commerce department in 2020. China is the dominant market for SMIC, accounting for 84 per cent of its revenue in the second quarter, unchanged from the first quarter, while the US contributed 12.9 per cent, slightly up from 12.6 per cent.
SMIC's second-quarter revenue rose 16.2 per cent year-on-year to US$2.2 billion. Its profit attributable to owners of SMIC declined 19.5 per cent to US$132.5 million, missing analysts' estimates of US$183.35 million, according to LSEG data.
SMIC's Hong Kong-traded shares were down more than five per cent on Friday.
Zhao said the previous rounds of tariffs resulted in less than 10 per cent of cost increases at its overseas customers.
"After these past few months, everyone has either stocked up enough inventory for this year and next year, or found other suppliers," Zhao said, "So I think the impact will become even smaller."
Zhao said SMIC's production capacity remains insufficient and would remain tight until October due to robust demand from domestic substitution.
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