China's apical foundry SMIC's co-CEO said connected Friday that U.S. tariff argumentation had not resulted successful the "hard landing" that the institution was initially disquieted astir and that beardown home request volition support its accumulation capableness choky until October.
Zhao Haijun, co-CEO of Semiconductor Manufacturing International Corp, told a post-earnings telephone that the institution is not consulting with customers regarding U.S. President Donald Trump's 100% tariff program connected spot imports but expects the interaction could beryllium smaller owed to contingency plans that had been made aft tariffs were announced successful April.
China raised further duties connected U.S. goods to 125% successful April aft Trump efficaciously raised tariffs connected Chinese goods to 145%. Trump said connected Wednesday the United States volition enforce a tariff of astir 100% connected imports of semiconductors, though that volition not use to companies that are manufacturing successful the U.S. oregon person committed to bash so.
SMIC was blacklisted by the U.S. commerce section successful 2020. China is the ascendant marketplace for SMIC, accounting for 84% of its gross successful the 2nd quarter, unchanged from the archetypal quarter, portion the U.S. contributed 12.9%, somewhat up from 12.6%.
SMIC's second-quarter revenue roseate 16.2% year-on-year to $2.2 billion. Its nett attributable to owners of SMIC declined 19.5% to $132.5 million, missing analysts' estimates of $183.35 million, according to LSEG data.
SMIC's Hong Kong-traded shares were down much than 5% connected Friday.
Zhao said the erstwhile rounds of tariffs resulted successful little than 10% of outgo increases astatine its overseas customers.
"After these past fewer months, everyone has either stocked up capable inventory for this twelvemonth and adjacent year, oregon recovered different suppliers," Zhao said, "So I deliberation the interaction volition go adjacent smaller."
Zhao said SMIC's accumulation capableness remains insufficient and would stay choky until October owed to robust request from home substitution.
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