Up to 41 out of 80 Chinese semiconductor firms that have released financial statements for 2022 ended the year with operating losses. IC design houses were the worst hit due to multiple factors, while most semiconductor equipment suppliers posted impressive profit results, according to Chinese media reports.
Based on Yicai reports, as many as 17 of 25 Chinese semiconductor companies listed on bourses reported negative net earnings, with four suffering losses for the first time and 12 registering declines of over 100% in net profits.
Among them, Suzhou MEMSensing Microsystems, one of the veteran Chinese suppliers of MEMS sensors, estimated the largest profit fall for 2022, with losses to range between CNY48.5-63.5 million (US$6.45-7.22 million), down 490.37-611.11% on year.
The company noted that unfavorable factors such as volatile pandemic conditions, geopolitical tensions and sluggish consumer market demand combined to drive down shipments for terminal consumer applications. In addition, severe price competition in the MEMS sensor market also dragged down the company's ASP, gross margins and overall revenues for 2022.
Meanwhile, AI chip startup Cambricon Technologies, which was among the 36 Chinese tech firms blacklisted by the US in mid-December 2022, estimated its net losses for the year to widen 25.46-53.34% on year to CNY1.035-1.265 billion.
Cambricon attributed the poor performance to decreases in shipments for cloud computing applications and lower-than-expected sales of edge computing chips, which significantly pushed up its inventory levels.
Many more Chinese IC design houses also posted lackluster revenue and profit performances for 2022, including Chipsea Tech, Puya Semiconductor, GalaxyCore, Halo Microelectronics, SDIC Microelectronics and Espressif Systems.
Most of their revenues and gross margins were undermined by intense price competitions among peers as they tried hard to slash inventories amid sluggish end-market demand. And some invested heavily in R&D and equipment upgrades designed to sustain competitiveness, also affecting their profitability.
In contrast, Chinese semiconductor equipment suppliers ended 2022 with much better business results than IC design houses, with Naura Technology, ACM Research, Hangzhou Changchuan Technology, and Hwatsing Technology all reporting over 100% growth in net profits for the year.
Article translated by Willis Ke
