Chipmaker SMIC Facing Risk of Supply Glut, Weak Demand -- Market Talk

Dow Jones02-08

0828 GMT - Semiconductor Manufacturing International Corp. could face an increasingly oversupplied China market, Jefferies analysts say. Trade curbs have spurred a capacity buildup among foundries in China, which is looking to localize production to reduce supply-chain risks. That has raised investor concerns about potential over-production, Jefferies says. Even more worryingly, SMIC has set a high capex budget for this year despite a sector downturn, it adds. Spending big amid a period of weak demand and oversupply could pressure margins and profitability for the next few years, the analysts say. Jefferies keeps a hold call on the stock and cuts its target to HK$16.00 from HK$22.00. Shares closed at HK$14.44. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

(END) Dow Jones Newswires

February 08, 2024 03:29 ET (08:29 GMT)

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Trade curbs have spurred a capacity buildup among foundries in ...</p>\n\n<a href=\"https://dowjonesnews.com/newdjn/logon.aspx?AL=N\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK1163","symbol_name":"半导体产品","start_time":0,"source_url":"https://dowjonesnews.com/newdjn/logon.aspx?AL=N","article_id":"2409764082","we_media_id":"106","thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2409764082","pubTimestamp":1707380940,"sourceInfo":null,"weMediaInfo":{"media_name":"Dow Jones","introduction":"Dow Jones publishes the world’s most trusted business news and financial information in a variety of media.","home_visible":0,"id":"106","head_image":"https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99"},"summary":"0828 GMT - Semiconductor Manufacturing International Corp. could face an increasingly oversupplied China market, Jefferies analysts say. Trade curbs have spurred a capacity buildup among foundries in China, which is looking to localize production to reduce supply-chain risks. That has raised investor concerns about potential over-production, Jefferies says. Even more worryingly, SMIC has set a high capex budget for this year despite a sector downturn, it adds. Spending big amid a period of weak demand and oversupply could pressure margins and profitability for the next few years, the analysts say. Jefferies keeps a hold call on the stock and cuts its target to HK$16.00 from HK$22.00. Shares closed at HK$14.44. 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