China’s largest chipmaker, Semiconductor Manufacturing International Corp (SMIC), reported quarterly revenue declines for the first time in three years, a signal many analysts are watching closely. The update, reported through CNBC, shows a new chapter in SMIC’s ongoing battle to grow within a global market that has been unsettled by shifting supply and demand dynamics as well as heightened export controls.
In the latest financial results, SMIC posted revenue of 1.46 billion USD for the first quarter, marking a year over year drop of 20.6 percent. The decline continues a pattern of softer sales that has persisted since late 2019, when the company last recorded a significant downward swing. Net income also fell sharply, down 48 percent to 231.1 million USD, underscoring the pressures facing the company amid a market surplus and muted demand in many tech sectors.
Market observers attribute the sales dip to an overhang of supply in the global semiconductor market coupled with softer demand across consumer electronics, automotive chips, and other tech components. The situation has been amplified by U.S. sanctions that constrain SMIC’s access to advanced manufacturing tools and key process technologies, further widening the gap between SMIC and the world’s leading foundries.
CNBC notes that SMIC is often heralded as a potential pillar of China’s semiconductor ambitions, with expectations that it could close the gap with dominant players such as TSMC and Samsung. Yet the company remains several technology generations behind the industry leaders due to continued restrictions on access to advanced fabrication equipment and software from the United States. The sanctions have complicated SMIC’s path toward manufacturing ever-smaller nodes and pushing performance benchmarks to match global leaders.
In another corporate update, Oppo, a major Chinese smartphone manufacturer, announced the dissolution of MariSilicon, its in-house chip development unit known as ZEKU. The move appears linked to uncertainties in the global economy and the broader smartphone market, suggesting a strategic pivot that emphasizes core device capabilities and supply chain resilience while reassessing the role of in-house semiconductor development within Oppo’s broader product roadmap. The decision reflects a broader recalibration underway in the sector as firms balance internal innovation with external sourcing amid a challenging macro landscape.
Industry insiders expect that the current cycle will push chipset players to accelerate efficiency improvements and cost controls. While SMIC has long been viewed as a potential foundation for domestic competition in China, the firm must navigate a complex landscape shaped by export controls, global demand shifts, and the rapid pace of technology development that favors established leaders with ready access to cutting-edge manufacturing tools. The evolving environment continues to influence investments, incentives, and strategic partnerships across the semiconductor ecosystem in North America and beyond, where U.S.-based suppliers, customer configurations, and policy support will likely shape future hiring, capacity decisions, and innovation trajectories.