The foundry's internal conflict has attracted increasing public attention, leading to multiple concerns about the Chinese semiconductor industry's future.
The ex-CEO of SMIC – Mengsong Liang – submitted his resignation on 16 December 2020, after the company appointed Shangyi Jiang to be its vice president. During Mengsong's tenure, he guided SMIC to complete its R&D roadmap, progressing from 28nm to 7nm chips. However, Mengsong's efforts did not meet President Zixue Zhou's expectations on operating incomes. According to SMIC's financial reports for the third quarter of 2020, its primary income sources are 55/65 nm chips and 40/45 nm chips, and 14/28 chips merely accounted for 14.6%.
As well as the internal conflict, SMIC is also facing some external issues. Firstly, the US and China technological war restricted the firm's growth. Specifically, there are shocks from the US blacklists and civil cases. Secondly, the loss of a big client – in the form of Huawei – further harmed SMIC's profitability. As the chipmaker plans to expand its capacity from 3,000 units to 15,000 units, it will be hard to find another large client to fill up this output gap.
Even if these internal and external variations might negatively influence SMIC, it will not hurt its operations too much but alter its development strategies. The participant of Shangyi will help SMIC to focus more on system integration techniques, such as small chips and advanced packaging.