Core tip: CIC is the first choice for Chinese mainland customers in the world, and mainland customers choose to increase the ratio of wick international as its preferred substitute partner from 60% in 2011 to 75% in 2012. At present, one of the core tasks of SMIC is to work with mainland design companies to provide a complete solution for special markets. In the long run, SMIC has entered a healthy development track. ,

Time: May 3, 2013

Location: Shanghai Pudong New Area wick International

Figures: Chief Executive and executive director of SMIC Qiu Ciyun

Liu Dong, editor in chief of the China electronic newspaper

Improving capacity utilization to maintain sustained profitability of enterprises

The short-term goal is to maximize the productivity utilization.

Medium and long term strategy is a special process to develop SMIC. In mature production capacity, it will develop special technology for special market in mainland China.

The long-term strategy is to continue to invest in advanced technology

Liu Dong: in 2012, SMIC's sales volume reached 1 billion 700 million US dollars, achieving a profit of 22 million 800 thousand US dollars for the whole year, a 7 year high. In the first quarter of this year, SMIC has been profitable for 4 consecutive quarters. We know that the new leadership of China core international was only in danger in 2011. Under the double pressure of the severe external market environment and the internal management confusion, what are the main factors that you think the core international can achieve profit?

Qiu Ciyun: last year, we could make profits. First of all, the company adjusted its strategy, formulated clear short, medium and long term goals, and had a strong team to execute efficiently. The short-term goal is to maximize the productivity utilization; the medium and long term strategy is a special process for developing the central international, which will develop special technology for the special market in the mainland; the long-term strategy is to continue to invest in advanced technology.

Last year, after the new leadership took office, SMIC set up a policy of persisting in independence and internationalization. After this policy was established, it stabilized the company and stabilized the customers.

Secondly, the company has rapidly improved the productivity utilization, and the productivity utilization rate has reached the high level in the past several quarters, and it has played a great role in the process of turning loss to profit.

Finally, we work harder in terms of product quality and customer service. To help customers to be more careful, more precise and faster in customer product introduction. In the capacity of many advanced technology, the whole process is compressed to 4~6 months from the customer's data to the center international and the product into the market. It helps many customers to win the market opportunity.

Last year, a survey by the Ministry of industry and information technology (Ministry of information technology) showed that China core international became the first choice of Chinese mainland customers in the world. Mainland customers chose to increase the ratio of wick international as its preferred substitute partner from 60% in 2011 to 75% in 2012.

These are the main reasons why SMIC could turn a profit last year.

Liu Dong: one view is that SMIC's profit is mainly achieved by reducing depreciation rate instead of through main business. What do you think about it?

Qiu Ciyun: in our financial statements, it is not like the outside said that the rate of depreciation is greatly reduced to achieve profit, and the profit of the central international is achieved through the main business. Compared with the year before last, the depreciation of the company was basically flat last year, and there was no big fluctuation. In the next few years, the company will be careful to manage depreciation, and depreciation may rise because the company will continue to invest, whether it is the two phase of Beijing, or the 12 inch, 8 inch factory in Shanghai.

Liu Dong: because of its advanced process technology and large scale of production capacity, the profit margins of the leading semiconductor foundries in the world are over 50%. Last year, the production capacity of TSMC was 10 times that of SMIC, and this year it will invest another US $about 10000000000 to further develop advanced technology and expand production capacity. The current gross interest rate at China core is around 20%. Can SMIC maintain sustained profitability? Where is the profit margin?

Qiu Ciyun: the planning of the semiconductor field is very important, and the core international has also increased its investment in the state of ensuring profit. The original goal can be achieved within a few years. I have a better view of the prospects for China core international. In the past year, the company's profit was mainly due to the high point of sales, and a great improvement in operational efficiency and productivity utilization. This advantage will continue in the future. In the future, we will continue to play a differentiated advantage and provide value-added services to our customers.

The new special technology will be gradually pushed forward next year, which will give SMIC more opportunities to increase profitability. Special technology is mainly targeted at special markets in mainland China, such as smart cards. The application of smart cards in China is very special, including identification card, traffic card, social security card, bank card and so on. The identity card market has nurtured a number of very outstanding design companies.

In addition, many applications have local particularities, and mainland design companies are more capable of providing special services for China's applications. As long as SMIC has done a good job in customer service, this market will be promising. At present, one of the core tasks of SMIC is to work with mainland design companies to provide a complete solution for special markets. In the long run, SMIC has entered a healthy development track.

Keep up with international advanced processes to meet target customers' needs

The company's main customers have two aspects: one is mobile terminals, the other two is consumer products.

By the end of this year 40nm business reached about 15%

We are now investing heavily in IP to ensure an advanced technology level for mainland customers.