Semiconductor Manufacturing International Corp, Chinas largest contract chip maker, said it has seen a clear rise in orders and improved capacity utilisation rates, as signs mount of a turnaround in the market. The upbeat view from SMIC Chief Executive Richard Chang, who said in an interview that Chinas economic stimulus measures were boosting demand, echoed comments last week by Taiwans TSMC.
The worlds largest contract chipmaker, which sharply raised its first-quarter sales and margin forecasts. The companys orders have gradually risen every month since the start of the year, while a substantial portion are rush orders from customers, he added.
The comments contrasted with the companys announcement last month of a surprisingly large quarterly loss of $124.5 million, double what analysts had expected, as recession-wary consumers cut back spending on PCs, cell phones and flat-screen TVs.
TSMC also attributed its recently improved outlook to rush orders from China, suggesting that a trend of falling sales that began six months ago had hit bottom. Chang said that, unlike the slump in economies elsewhere, the slowdown in Chinas economic growth may already have hit bottom late last year or early this year. The governments 4 trillion yuan ($585 billion) economic stimulus, the construction of 3G mobile telecoms networks and subsidies of home electronics purchases in rural areas have given a major boost to Chinas semiconductor market, he added.
China formally issued three licences for high-speed 3G wireless networks in January and officials have estimated that 3G investment this year would total 170 billion yuan. The peak for 3G-related chip demand is expected in the 2010 to 2012 period.