# SMIC (Semiconductor Manufacturing International Corporation) > China's largest domestic chip foundry, blocked from EUV lithography by the US Entity List since 2020, now producing 7nm chips for Huawei's AI and mobile programs. **Meta:** type: reference · date: 2026-07-03 · heads: · 4 takes · 4 lenses · 3 regions ## What it is SMIC (Semiconductor Manufacturing International Corporation, 中芯国际) is mainland China's largest semiconductor foundry, headquartered in Shanghai and listed on the Hong Kong Stock Exchange (0981.HK) and China's STAR Market (688981.SH). A pure-play foundry manufactures chips to other companies' designs. SMIC offers process nodes from 350nm down to 7nm via its proprietary N+2 DUV-based process, covering China's domestic chip demand from mature-node display drivers to 7nm AI accelerators and mobile SoCs. The pivotal constraint is lithography. TSMC and Samsung reach 3nm and below using extreme-ultraviolet (EUV) scanners. SMIC cannot: the Netherlands banned EUV exports to China in 2019, and the US Entity List blocks American equipment required for advanced-node manufacturing. SMIC instead layers multiple DUV exposures, a technique called multi-patterning, to print smaller features at higher cost and lower yield than EUV peers. ## History SMIC was founded in 2000 by Richard Chang (张汝京), a Texas Instruments veteran, with Shanghai municipal government backing. It listed on HKEX in 2004. A TSMC intellectual-property lawsuit settled in 2009 cost SMIC equity stakes and royalties. The China Integrated Circuit Industry Investment Fund ("Big Fund", CICIF) took a significant position after 2014, tying SMIC's expansion to Made in China 2025 semiconductor targets. In December 2020, the US Department of Commerce added SMIC to the Bureau of Industry and Security (BIS) Entity List, citing China's military-civil fusion doctrine and placing a presumption of denial on items enabling chip production at 10nm or below. The watershed came in August 2023, when teardown firm TechInsights found a 7nm-class Kirin 9000S chip inside Huawei's Mate 60 Pro, manufactured by SMIC via DUV multi-patterning without EUV. The find contradicted consensus forecasts that had placed China's 7nm capability years away, and triggered fresh US scrutiny of DUV tool and chemical export controls. ## Current state SMIC reported full-year 2025 revenue of US$9.33 billion, up 16.2% year-on-year. Capital expenditure reached US$8.1 billion, among the largest foundry capex programs globally. Monthly wafer capacity stood at 1,059,000 8-inch equivalents at year-end, with annualized utilization at 93.5%, up 8 percentage points. Net profit rose 39.1% to US$685 million. In 2026, the advanced-node priority is the [N+2 ramp for Huawei's Ascend AI accelerators](/ar/n/smic-7nm-double-ascend-2026), with SMIC reportedly doubling N+2 capacity for the Ascend 910C and 910D. A 5nm DUV pilot is underway, with mass production targeted this year; yields are estimated at 30 to 40%, well below TSMC's 80%+. Beijing's Big Fund III (approximately US$47.5 billion) absorbs the cost gap as a national-security spend, reflecting China's [anti-involution industrial policy](/ar/n/xi-anti-involution-economy) of channeling state capital to strategic chokepoints. In February 2026, Applied Materials paid a US$252.5 million BIS penalty for routing semiconductor equipment through South Korea to SMIC, in violation of Entity List terms. ## Relationships SMIC's primary advanced-node customer is Huawei, whose Kirin mobile processors and Ascend AI accelerators consume the bulk of N+1/N+2 wafer output. At mature nodes (28nm and above), customers include Qualcomm, Broadcom, and Texas Instruments. Major shareholders are state-linked: the China Integrated Circuit Industry Investment Fund and Datang Telecom Group hold significant positions, giving Beijing leverage over capacity and technology priorities. Access to lithography is the central structural tension. SMIC relies on ASML's DUV scanners for advanced patterning, with all EUV machines blocked by Dutch and US export rules. The [2026 US-Netherlands dispute over alleged EUV components in China](/ar/n/asml-euv-china-components-dispute) showed how closely both governments watch that boundary. Domestic equipment makers NAURA and AMEC supply some mature-node tools but remain behind Western incumbents at advanced nodes. The [US restriction on Nvidia H200 exports to China](/ar/n/h200-china-export-standoff) created the AI-chip gap that Huawei Ascend products, and therefore SMIC N+2 wafers, are built to fill. ## What to watch - Whether SMIC's 5nm DUV pilot reaches mass production in 2026, narrowing the gap to TSMC's N3 to less than two nodes. - New US or Dutch restrictions on DUV equipment, photoresists, or process chemicals, the remaining legal inputs for multi-patterning. - Big Fund III flows into SMIC's new Shanghai, Shenzhen, and Beijing fabs, and whether 2025 capex levels hold. - Further BIS enforcement against equipment suppliers routing restricted tools to SMIC, following the Applied Materials settlement. - Huawei Ascend 910D volume and whether SMIC's yield trajectory makes the ramp viable without ongoing state subsidy. ## Regional takes (batched by bias / lens) ### official IR release - **SMIC, Q4 and Full Year 2025 Earnings Release** (China, en) — SMIC's official Q4 and full-year 2025 earnings: US$9.33 billion revenue (up 16.2%), US$8.1 billion capex, monthly capacity 1.059 million wafers, 93.5% utilization, and net profit of US$685 million. Source: https://www.smics.com/en/site/news_read/7949 ### official record - **US Department of Commerce, SMIC Entity List Addition, December 2020** (United States, en) — BIS press release announcing SMIC's Entity List designation, citing China's military-civil fusion doctrine and placing a presumption of denial on sub-10nm enabling technology exports to SMIC. Source: https://2017-2021.commerce.gov/news/press-releases/2020/12/commerce-adds-chinas-smic-entity-list-restricting-access-key-enabling.html ### Taiwan tech press, editorial analysis - **Taipei Times, How SMIC Turned US Sanctions Into a China Success Story** (Taiwan, en) — Analysis of SMIC's N+1 7nm breakthrough and the Huawei Mate 60 Pro reveal, arguing that state capital absorbed the yield losses no commercial foundry could sustain on its own. Source: https://www.taipeitimes.com/News/editorials/archives/2023/11/25/2003809671 ### US policy analysis journal - **American Affairs Journal, The Evolution of China's Semiconductor Industry Under US Export Controls** (United States, en) — Long-form analysis of how US export controls from 2019 to 2024 shaped SMIC's technology roadmap, covering the Entity List, DUV dependency, and China's Big Fund capital response. Source: https://americanaffairsjournal.org/2024/11/the-evolution-of-chinas-semiconductor-industry-under-u-s-export-controls/ ## Across the graph - Related: [[smic-7nm-double-ascend-2026]], [[asml-euv-china-components-dispute]], [[h200-china-export-standoff]], [[xi-anti-involution-economy]] - Entities: Corporate:smic, China, Huawei, Corporate:asml, United States --- Canonical: https://rbtfl.xyz/ar/n/smic-dossier