(Bloomberg) — Semiconductor Manufacturing International Corp. said its Vice-Chairman Chiang Shang-Yi resigned less than a year after joining China’s biggest chipmaker, the second departure of a senior executive in two months.
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Chiang, who is in his mid-70s, has left the Shanghai-based company to spend more time with his family, according to a company filing Thursday. The chip industry veteran joined SMIC in December last year, after having helped to turn Taiwan Semiconductor Manufacturing Corp. into the world’s most influential contract chip manufacturer more than a decade ago. The stock dropped as much as 4.5% on Friday in Hong Kong.
Alongside Chiang’s departure, SMIC also reported revenue climbed 31% to $1.42 billion in the three months ended in September, compared with the $1.39 billion average of analysts’ forecast. Profit was $321.4 million in the same period, the company said in a separate filing, also beating estimates.
The resignation marks the latest management upheaval at SMIC, which is considered Beijing’s best hope at making advanced chips to counter ongoing sanctions by the U.S. In September, Chairman Zhou Zixue stepped down for health reasons, while co-Chief Executive Officer Liang Mong Song threatened to quit in late 2020 after learning Chiang would join as vice-chairman.
Both Liang and Chiang are among the industry’s top developers but represent different technology paths. Liang later stayed after rounds of negotiations. He’s stepping down as an executive director but will continue to serve as co-CEO, SMIC said Thursday.
Before SMIC, Chiang ran Wuhan-based Hongxin Semiconductor Manufacturing Co., a government-backed chipmaker. He left after the company ran into funding troubles.
To satisfy China’s demand for home-made chips, SMIC has been expanding its capacity with a $8.87 billion new plant in Shanghai as well as a $2.35 billion factory in Shenzhen. It is the most capable chipmaker in China in terms of capacity and technical know-how, but the company has been unable to buy key machinery from overseas suppliers including ASML Holding NV after it was blacklisted by the Trump administration.
SMIC is working hard to resolve shortages, executives said on a conference call Friday. Some license approvals have been delayed, but the company is making sure expansions are on schedule, they said. SMIC is trying to accelerate the licensing approval process so they can have equipment for output expansion, which will be tripling the company’s current capacity in the coming years, co-CEO Zhao Haijun added.
“We will make every effort to work with suppliers to speed up procurement, delivery,” Zhao said.
Revenue for the fourth quarter will increase 11% to 13% from the previous three months, with gross margin of as much as 35%, the chipmaker said. It boosted its full-year sales growth target to around 39%, or 29% based on Chinese accounting standards. Demand will continue to outpace supply throughout 2022 and the company expects to grow no less than the industry average, Zhao said.
(Updates with shares, details about earnings.)
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