By Greg Gao

(JW Insights) Aug 7 -- SMIC(中芯国际), China's top pure-play semiconductor foundry company, may have a stable profit margin that could stay above pre-COVID-19 levels, despite the slump in production of PC and smartphone chips, according to a Bloomberg analyst.

This is attributed to the growing demand for automotive, industrial, and edge artificial intelligence (AI) devices, which has led to a rapid recovery in wafer plant capacity utilization rates and maintained profitability.

The analyst stated that power chips and high-speed interfaces are key areas of growth. Despite diminishing demand for PC-related semiconductors like display driver ICs, global wafer foundries are expected to exhibit robust resilience in capacity utilization due to the proliferation of electric vehicles and smart edge devices, driving orders for mature process chips ranging from 28nm to 180nm.

Research firm Gartner predicts that thanks to broader application scopes, sales of power and high-speed network interface chips will experience the fastest growth from 2022 to 2026, with an annual growth rate exceeding 8.5%. The tight supply of 8-inch wafers globally from 2020 to 2021 has expedited the shift of chip orders to 12-inch wafer fabs, thereby reinforcing demand resilience.

Although 8-inch wafer capacity utilization rates of UMC and SMIC have dropped due to canceled orders from smartphone manufacturers and PC chip design houses. Meanwhile, Chinese semiconductor maker Hua Hong, specializing in storage chips and power chips, achieved utilization rates exceeding 100% in the first quarter.