By Josh Horwitz
SHANGHAI (Reuters) -Chinese chip foundry Semiconductor Manufacturing International Corp (SMIC) on Thursday reported a 34.7% rise in third-quarter revenue and lifted its capital expenditure plan, but missed estimates and warned investors about the impact of export controls from the U.S.
The company generated revenue of $1.91 billion in the quarter, up from $1.42 billion in the same period a year earlier but below analyst expectations of $1.94 billion.
Net profit, meanwhile, rose 54.1% to $574.4 million, while gross profit increased 58.6% to $742.2 million.
In its filing, SMIC said that weak demand in the consumer market, coupled with new export controls from the United States would weigh on its fourth-quarter results.
The new rules will have an “adverse impact” on production and operations, and the company is working on clarifying certain definitions in the rules, it added.
Despite this, the company lifted its capital expansion plan for the year to $6.6 billion from $5 billion.
Backed by funding from Beijing, SMIC is China’s best hope for becoming a global leader in chip manufacturing that can rival Taiwan Semiconductor Manufacturing Corporation (TSMC), the industry’s largest foundry.
The company remains generations behind in leading-edge technology, however.
It has been in Washington’s crosshairs in recent years, as part of its ongoing spat with Beijing over chip technology.
In early October, the U.S. department of commerce released a sweeping set of export controls aimed at containing advancement among China’s chip manufacturers.
The restrictions are further set to hamper SMIC’s ambitions for making advanced chips, experts say.
Earlier on Thursday, Chinese chip fab Hua Hong Semiconductor Ltd reported a 39.5% year-on-year rise in revenue to a record high of $629.9 million, while net profits were also up 83.7%.
(Reporting by Josh Horwitz; Editing by Jan Harvey, Kirsten Donovan)
