China’s largest foundry, Semiconductor Manufacturing International Corp. (SMIC), is nowhere near the same capabilities to produce advanced chips as TSMC and Samsung. But while China dreams of being self-sufficient when it comes to chips, SMIC’s most advanced chips are basic 7nm SoCs for cryptocurrency miners and 14nm smartphone chips. That can be compared with the 3nm chips that TSMC and Samsung are sending this year.
China’s top foundry, SMIC, is a few process hubs behind TSMC and Samsung
We’ve explained it many times, but the best way to explain the process node numbers without making it too complex is this: the smaller the process node, the smaller the transistors, meaning the higher the number of transistors on a chip. For example, the 7nm Apple A13 Bionic SoC has 8.5 billion transistors in each chipset. Manufactured by TSMC using its first generation 5nm process node, the A14 Bionic has 11.8 billion transistors and the A15 Bionic, which uses TSMC’s enhanced 5nm node, has 15 billion transistors.
Huawei’s Kirin 710A chipset is manufactured by SMIC using its 14nm process node
The reason this is important is that the higher the number of transistors on a chip, the more powerful and energy efficient it is. The A16 Bionic SoC, which is expected to power the iPhone 14 Pro and iPhone 14 Pro Max, will be produced using TSMC’s 4nm process node.
SMIC still expects its factories to run at high capacity utilization for the next two years
Still, SMIC expects its factories to have high utilization rates in the next two years as more and more devices and products in China, such as appliances and cars, use more chips. And SMIC gets more customers from fabulous chip designers in China. The company’s shares are traded on the Hong Kong stock market, where the foundry has a market capitalization (share price multiplied by the number of shares outstanding) of $201.86 billion Hong Kong Dollars ($25.76 billion USD).
Investors, fearing the global consumer electronics slump would hurt SMIC, sent the foundry’s shares in Hong Kong up 3.1% to $17.08 Hong Kong Dollars ($2.18 USD) on Friday. The 52-week high is $26.30 Hong Kong Dollars, while the 52-week low is $14.64 Hong Kong Dollars.