Credit: Visual China

BEIJING, July 18 (TMTPost) - Semiconductor Manufacturing International Corp (SMIC) (688981.SH /00981.HK) announced on Monday evening the appointment of a new chairman to replace Gao Yonggang, who resigned as Chairman and Executive Director of the company “due to job adjustment.”

Liu Xunfeng, Vice Chairman and Executive Director of the company, took over the post of chairman immediately after the appointment.  

It has been less than two years since the last change in leadership at SMIC. In September 2021, Zhou Zixue, the company’s former chairman, resigned due to health issues. Gao, who was serving as the company’s Chief Financial Officer (CFO) at the time, temporarily took over as acting chairman to perform the relevant duties. Gao was officially appointed as the chairman in March 2022.

In February 2023, Gao resigned from his position as CFO of SMIC. The reason for his resignation, according to the announcement made by the company then, was to focus on his duties as Chairman and Executive Director.

With Gao’s resignation on Monday, the size of SMIC’s board of directors has been further reduced. Over the past three years, the board has consistently downsized from 15 members in December 2020 to the current count of eight. Among these, the number of executive directors has decreased from five to one.

It has been less than a quarter since Liu joined the company. On May 12, 2023, SMIC announced the appointment of him as Vice Chairman and Executive Director. The announcement mentioned that Liu was recommended as a candidate by the China Integrated Circuit Industry Investment Fund, also known as the Big Fund.

With a background in energy and chemical industries, Liu previously worked at various companies, including SINOPEC Shanghai Petrochemical Co., Ltd. and Shanghai Chemical Industry Park Development Co., Ltd. He currently holds multiple positions, including Party Secretary and Chairman of Shanghai Huayi (Group) Co., Ltd.

SMIC’s 2022 annual report shows that among the company’s shareholders, Xinxin (Hong Kong) Capital Co., Ltd. (Xinxin Hong Kong) holds 7.80% of the shares and is the company’s third largest shareholder. Xinxin Hong Kong is a wholly-owned subsidiary of Xunxin (Shanghai) Investment Co., Ltd., which is wholly owned by the Big Fund.

SMIC is the largest wafer foundry enterprise in mainland China. According to market research firm TrendForce, in the first quarter of 2023, SMIC was ranked as the fifth-largest wafer foundry globally, with a market share of 5.3%.

The global wafer foundry market has been declining since the second half of 2022 and is currently in a downward cycle. Research firm Sigmaintell predicts that the global wafer foundry industry revenue will shrink by approximately 20.8% year-on-year in 2023.

SMIC’s performance has been under pressure. In the first quarter of 2023, the company’s revenue was $1.46 billion, representing a year-on-year decline of 20.6% and a quarter-on-quarter decline of 9.8%. The net profit was $267 million, reflecting a year-on-year decrease of 53.1% and a quarter-on-quarter decrease of 37.2%.

SMIC has been expanding its production capacity in the mature process field in recent years. According to TrendForce, the 12-inch wafer capacity share of mainland China’s wafer foundry industry is predicted to increase from 24% in 2022 to 26% by 2026.