A leading manufacturer of chips gives China is undergoing another major change in leadership. Semiconductor Manufacturing International Corporation (SMIC) announced a wave of layoffs in documents published to stock exchange investors late on Thursday (11).
Four directors left office at the same time, including Vice President Chiang Shang-yi. He joined the company just a year ago, coming from the Taiwanese giant TSMC.
The news further clouds the prospects for SMIC, which has been trying to move forward after being placed on the list of US restrictions. USA last year. Former company president Zhou Zixue also stepped down in September for personal health reasons.
SMIC was also hit by a regulatory notice from the Stock Exchange of Shanghai, which disclosed on Thursday that its supervisory body had sent the company a “supervisory” letter. The exchange did not elaborate on what that message implied, or provide a reason for it.
The announcements shocked investors: the company’s shares fell about 4% in Shanghai and in Hong Kong on Friday (12).
The board now has 11 directors. Among those leaving is Liang Mong Song, current co-chair of SMIC. The company said Liang plans to remain in the executive role and that his resignation as a director was to focus more on his directorship roles.
Chiang, on the other hand, cited a desire to spend more time with his family, according to the company. Gao Yonggang, SMIC’s acting president and chief financial officer, said on Friday that Chiang would remain as a consultant.
The remaining two directors said in a regulatory process that they had no disagreement with the board and were stepping down to devote more time to other work commitments.
In a call with analysts on Friday, Gao said the exits “would have no material impact on the company’s operations”.
He also said the company has no plans in the near future to add more directors, noting that its current board size is similar to that of “other companies in the industry”.
SMIC reported strong earnings on Thursday, with revenue jumping more than 30% year-over-year to $1.4 billion in the quarter ended September.
a challenging year
SMIC, China’s biggest chip maker, has dealt with leadership tensions before.
Last year, the company startled investors by revealing that it was trying to confirm reports in Chinese state media that Liang had resigned, apparently in protest against Chiang’s appointment to the board.
Liang is reported to have said at the time that he was concerned about the appointment of Chiang, the former co-head of operations at Taiwanese chip maker TSMC. Since then, the two executives have remained – until now.
But the company has also faced a number of public setbacks recently, including threats from the United States to its business as it tries to play a critical role in China’s mission to become more self-sufficient in semiconductors.
Last year, the US Department of Defense added SMIC to a list of companies the agency claimed were owned or controlled by the Chinese military, a decision that meant SMIC would be subject to restrictions such as its inability to accept US investments.
SMIC said at the time that its inclusion on the list “would not have a major impact” on its operations and that it had no relationship with the Chinese military.
The company’s problems were later exacerbated by a separate decision by the US Department of Commerce to add it to its list of restrictions, which limits SMIC’s ability to purchase certain technology from the United States, imposing more requirements on US exporters. The US agency cited national security concerns.
SMIC came into the US government’s crosshairs as tensions between Washington and Beijing escalated on several fronts, including the future of technology.
Cutting-edge chip technology is at the heart of this. Much of China’s chip supply has historically come from foreign companies, which supply the part for everything from Chinese smartphones and computers to telecommunications equipment.
Beijing has pledged to improve its chip-making technology. SMIC, whose main shareholders are state-owned companies, said last year it wanted to invest in technology and catch up with its global competitors.
The company did not immediately respond to a request for additional comments.
But “since SMIC was placed on a list of entities across the US … the company has faced enormous challenges in production and operations,” Gao told analysts on Friday.
“The year 2021 is not an ordinary year,” he added.
(*Translated text. Click here to read the original, in English)
Reference: CNN Brasil