SMIC bets on capacity expansion despite margin headwinds

Beijing: China’s largest contract chipmaker, Semiconductor Manufacturing International Corp, warned of margin pressure this year as it expects a surge in depreciation costs due to a massive capacity expansion to meet strong demand for chips.

The company’s Hong Kong-listed shares dropped nearly 4% on Wednesday after the company said it expected flat revenue growth ‌in the ⁠current quarter ⁠from the previous quarter and warned of a 30% jump in depreciation costs this year.