The COVID-19 pandemic and the Ukraine-Russia war have brought uncertainty to the global integrated circuit industry. While China's leading chipmake Semiconductor Manufacturing International Corporation (SMIC)'s performance in the first quarter was impressive thanks to its earlier capacity optimization and allocation adjustments, its existing business lines have been disrupted by the long logistics chain.

According to the company's recent quarterly report, it achieved revenue of CNY 11.854 billion, an increase of 62.6% year-on-year, while net profit attributable to shareholders was CNY 2.843 billion, up 175.5% year-on-year. Its gross margin for the quarter was 40.7%, an increase of 5.7 percentage points from the previous quarter and above the upper limit of the 36%-38% guidance.

As the consumer electronics chip market enters the destocking phase and demand slows down, the pandemic has lowered SMIC's capacity utilization rate, and factory maintenance delays and rising raw material costs may affect the company's performance in the second quarter.