SMIC denied price to promote production: Beijing Shanghai factory full load operation

EST on October 20th (Beijing time at 21:34 on October 20th) 09:34 news from SMIC (Nasdaq: SMI) customer sources said, in order to maintain a high level of equipment utilization, SMIC has notified its main customers, the product will reduce the price of 5-10%, improve the proportion of products with DRAM memory. For these rumors, SMIC denied that the company's quarterly utilization rate of equipment will not be lower than the previous quarter of 85%. The company also said that the current Shanghai and Beijing factories are running at full capacity, WLAN and consumer electronics related chip demand showed a strong growth trend. SMIC's customers, however, suggest that they have received notice from SMIC that SMIC will cut its prices this quarter.

Sources said that in order to improve equipment utilization, SMIC third quarter production of excess liquid crystal drive circuit (LCD driver IC) and standard DRAM memory. Therefore, although the demand for liquid crystal drive circuit in this quarter is still strong, but due to inventory, equipment utilization is still likely to decline. To this end, SMIC will adjust product prices to maintain stability. In addition, from Taiwan and Hongkong, the memory of the dealer's message, SMIC has begun to implement a more active DRAM sales plan.

Industry insiders believe that, even if SMIC take price measures, do not give too much pressure on the wafer manufacturers in Taiwan, because SMIC products to 0.25 micron and 0.18 micron technology based. Hongkong and Taiwan LCD driver circuit design manufacturers also said SMIC's potential price adjustments will not affect their relationship with other manufacturers, because the manufacturers pay more attention to the development of long-term cooperative relations.