China’s listed semiconductor companies report strong growth

China's semiconductor sector continued its robust growth on Tuesday, following recent positive momentum in the A-share market, with several domestic industry players hitting their daily trading limits.

Among the standout performers, Sprint Precision Technologies (Jiangsu) Co surged by 20 percent on the Shanghai Stock Exchange's Science and Technology Innovation Board, reaching its daily trading limit. Similarly, Ningbo-based Kangqiang Electronics also hit its daily limit on the same day. Other companies, including the Shanghai-based Semiconductor Manufacturing International Corp, also recorded positive growth in the capital market.

The growth came after 65 listed companies published their business forecasts for the whole year of 2024 ahead of schedule as of Monday, with more than half of them projecting positive year-on-year growth, Securities Daily reported on Tuesday.

Based on the upper limit of year-on-year net profit growth forecasts, companies within the semiconductor industry chain ranked among the top and achieved remarkable performances, the report said.

For example, Sprint Precision Technologies (Jiangsu) Co, a key components manufacturer in the semiconductor etching and thin-film deposition equipment segment, is expected to achieve a net profit attributable to shareholders of listed companies ranging from 215 million to 225 million yuan this year, representing a year-on-year growth of 167.83 percent to 180.29 percent.

"Globally, there is robust demand in the semiconductor industry. Chinese enterprises have actively engaged in international trade and collaboration, with semiconductor exports reaching record highs… The strong performances of these companies reflect their actual business development in innovation and manufacturing, which I believe is the primary reason behind their success," Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Tuesday.

In terms of innovation, according to a projection by SEMI, China's investment in semiconductor equipment is expected to remain robust, with spending on chip equipment projected to account for 32 percent of the global share in 2024, Yicai.com reported. The report also indicates that China will likely retain its position as the world's top spender on 300-millimeter equipment through 2027, with over $100 billion in investments anticipated over the next three years.

When it comes to production, another report by TechInsights suggested that, in the third quarter of 2024, China maintained its position as the world's largest single smartphone market, with smartphone shipments reaching 65.7 million units, continuing a recovery trend for three consecutive quarters, according to media reports.

"Amid fluctuations and challenges in the international supply chain, domestic industrial opportunities have expanded… Chinese companies have leveraged this growth to seize opportunities and strengthen their position," Zhou further noted.

The continuous improvement in China's chip production capabilities and technological advancements over the year, including support from the government for the private sector, with increased investments in talent, equipment, and raw materials, is also a major result of industry growth, Ma Jihua, a veteran telecom industry observer, told the Global Times.

The positive industry performance also demonstrates that, despite the Biden administration's various restrictions on China's semiconductor industry, these measures have not dampened China's determination to advance its semiconductor sector, Ma said, noting that instead, these restrictions have limited the ability of US companies to better seize opportunities in the vast Chinese market, while China's semiconductor industry players have achieved rapid growth.

China's semiconductor exports have seen remarkable growthdespite the US restrictions. In the first 11 months of 2024, semiconductor exports reached 1.03 trillion yuan ($141.11 billion), representing a 20.3 percent year-on-year increase, according to data released by the General Administration of Customs on December 10.

Looking ahead, the semiconductor equipment market is expected to see robust growth in 2025, with an anticipated increase of 19.6 percent year-on-year, a latest report released by TechInsights said, noting that this growth will primarily be driven by sustained high demand from the Chinese market.

As one of the world's largest semiconductor markets, China is set to continue playing a pivotal role in the industry in the coming years, the report said.

In the future, domestic semiconductor companies should continue to increase their investment in research and devleopment, with promising prospects for further expansion and investment, Ma said.