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China's largest chipmaker Semiconductor Manufacturing International Corporation (SMIC) reported a drop in revenue in its first quarter fiscal results on Thursday, but said it will roll out new products and take other measures to boost growth amid lingering external uncertainties including the US crackdown.

The company's revenue was $1.46 billion in the first quarter, down from $1.62 billion in the fourth quarter of 2022, and $1.84 billion in first quarter of 2022, mainly due to a decrease in wafer sales and the decline in capacity utilization.

Despite the drop, the company's first quarter revenue slightly beat expectations, and gross margins were close to the high end of its guidance range.

SMIC said it expects better capacity utilization rates and shipments in the second quarter and revenue is expected to increase by 5 to 7 percent in the quarter.

The company has carried out capital expenditure in line with its expansion plan. Currently, SMIC Shenzhen has entered mass production while SMIC Jingcheng is expected to begin mass production in the second half of the year.

Looking ahead, the degree of recovery in the second half of the year is still not clear.

In early February, the company issued a grim warning of a double-digit decline in revenue for 2023 due to an industry downturn and external uncertainties.

China's semiconductor industry and SMIC itself have been among the top targets in the US' relentless technology crackdown campaign against China. The US put SMIC on its so-called Entity List as early as 2020, effectively banning supplies of critical chipmaking machines to the Chinese firm.

Despite the US crackdown, SMIC has made strides in both revenue and technological advancement.

For example, the company saw an annual growth rate of more than 30 percent for two consecutive years in 2021 and 2022.

Technologically, it took SMIC two years to achieve a breakthrough from 14nm to 7nm production, which is even faster than TSMC and Samsung, according to media reports.

"Facing the dynamic market changes, we will continue to follow the strategy of being market-oriented and customer-focused, and will strengthen communication with the end market," SMIC said on Thursday in the fiscal report.

Global Times