His resignation comes only 11 months after he was appointed
as executive director and vice-chairman of SMIC, and a member of its strategic
committee, a move that prompted the company’s co-CEO Liang Mong Song to submit
a letter of resignation, which was later withdrawn. Contacted via LinkedIn on
Thursday evening, Chiang, 74, told the Post that he will soon go to the US to
join his family in the San Francisco Bay Area. “[I] Don’t have any plan other
than enjoying retirement life,” Chiang said.
Liang, also a former TSMC senior engineer, will remain in
his role as SMIC’s co-CEO but has resigned from the board as executive
director.
Zhou Jie and Young Kwang Leei also resigned from the board
as non-executive director and independent non-executive director, respectively.
All resignations took effect on Thursday, and SMIC said none
of the executives had disagreements with the board.
On Thursday night, the Shanghai Stock Exchange sent a
regulatory notice to SMIC after its announcement of the management changes, but
the contents of the notice were not publicly available. In a conference call
with analysts on Friday morning, SMIC’s chief financial officer Gao Yonggang
said Chiang would continue as an adviser to the company. When he was first
appointed as vice-chairman, SMIC hailed Chiang, who served as an independent
non-executive director at SMIC from December 2016 to June 2019, as a pioneer
who dedicated his career to advancing the semiconductor industry.
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| Chiang Shangyi has resigned as vice chairman of SMIC. Photo: Handout |
Chiang’s move to SMIC came just months after he left HSMC, a
failed semiconductor project in Wuhan. He told the Post in a written message at
the time that his experience at HSMC was a “nightmare”, and that he was unaware
of the extent of its financial difficulties until the local government exposed
the problem in July 2020.
The boardroom shake-up comes as SMIC, the world’s
fourth-largest foundry and China’s most advanced chip maker, reported record
high third-quarter revenue of US$1.42 billion, up 30.7 per cent year on year,
boosted by a protracted semiconductor shortage. Co-CEO Zhao Haijun said on
Friday’s call that the manufacturing capacity shortage remains severe, which
would bode well for the company’s planned capacity expansion of mature
technology. Revenue from advanced FinFet 14-nanometre and 28-nm processes
accounted for 18.2 per cent of SMIC’s total wafer revenue in the third quarter,
the highest for the year and well above the 14.6 per cent in the same quarter
last year.
That means more customers are using the company’s most
advanced technology offerings even though its more mature 55-nm and 65-nm
processes remain the biggest wafer revenue contributors. Third-quarter net
profits grew 25 per cent year on year to US$321 million, but fell by more than
half from second-quarter profits of US$688 million, which were boosted by
one-off proceeds from selling a subsidiary for US$231.4 million.
Being added to the US blacklist hindered SMIC’s ability to
carry out research and development of advanced processes below 10-nm. Gao said
he expects the company’s full-year capital expansion plan of US$4.3 billion
will remain on track despite facing constraints from US export license
approvals for fab tools, supply chain tightness, and prolonged lead times for
equipment.
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| Liang Mong Song, co-CEO of SMIC. Photo: Handout |
SMIC has teamed up with municipal governments in Beijing,
Shanghai and Shenzhen to build three 28-nm foundries in each city. The total
capacity of the three fabs combined could amount to 600,000 wafers per month,
the company said. SMIC’s shares opened down 2.13 per cent in Hong Kong on
Friday morning.
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