What’s new: Semiconductor Manufacturing International Corp. (SMIC), China’s leading maker of microchips, announced an upward revision to its previous guidance for its third-quarter revenue and gross margin.
The company said it expects its revenue for the three months to September will grow 14% to 16% on a sequential basis, versus previous guidance for a 1% to 3% rise. It said it expects its gross margin for the latest quarter will be between 23% and 25%, up from earlier guidance of 19% to 21%.
It cited “changes in product mix and increase in other operating income” as the reasons behind the revision. The company plans to announce its official third-quarter results on Nov. 11.
What’s the significance: Despite the big upward revision, SMIC’s Hong Kong-listed shares were up a modest 0.8% in morning trade, while its Shanghai-listed shares were up about 1.2%.
The company’s stock surged in the first half of this year, at one point more than tripling from its levels at the start of the year, on hopes that it would become a major beneficiary of China’s efforts to develop its domestic chipmaking industry.
But the shares have tumbled more recently after the U.S. indicated it will restrict sales to the company from its American suppliers as part of a broader effort to stymie China’s technological development. Since reaching a peak in early July, SMIC’s Hong Kong-listed shares have lost more than half of their value.
Related: Chinese Chipmaker SMIC Confirms U.S. Export Curbs
Contact reporter Yang Ge (geyang@caixin.com)
