Despite facing trade restrictions, China’s Semiconductor Manufacturing International Corporation (SMIC) has achieved the remarkable feat of becoming the world’s third-largest foundry by revenue in Q1 2024. According to Counterpoint Research, the global foundry industry saw a 12 percent year-on-year revenue increase during the first quarter of the year, with Taiwan Semiconductor Manufacturing Company (TSMC) leading the pack and Samsung Foundry holding onto the number two spot.

SMIC’s surprising quarterly results have propelled it past UMC and Global Foundries to claim the number three position in foundry revenue market share. This achievement is particularly significant as SMIC had never before reached this ranking. While its 6 percent market share still trails behind TSMC and Samsung, this milestone is sure to raise eyebrows in the US, especially amidst concerns over SMIC potentially violating export restrictions to supply chips to Huawei.

Despite facing challenges due to US sanctions that restrict American companies from selling technology to SMIC without a license, SMIC has demonstrated resourcefulness by developing a complex 7nm chip using innovative techniques like multiple patterning with DUV equipment. This workaround allowed SMIC to produce chips for devices like the Huawei Pura series, showcasing its capabilities despite limitations.

Looking ahead, while TSMC and Samsung have already begun producing 3nm chips, SMIC has the potential to manufacture 5nm chips using DUV technology, albeit at a higher cost. Apart from smartphones, SMIC also caters to diverse industries such as computers, IoT devices, and automobiles – with a significant portion of its revenue coming from Chinese clientele.

The rise of SMIC as a major player in the global foundry industry is a testament to its resilience and innovation in navigating challenging circumstances. As it continues to push boundaries in chip manufacturing technology, all eyes will be on how SMIC further cements its position in an ever-evolving landscape.