Overnight, China’s biggest chipmaker lost a fourth of its board

Key Takeaways:

• China’s largest chipmaker is undergoing yet another significant leadership change.
• On Thursday evening, Semiconductor Manufacturing International Corporation (SMIC) reported a wave of resignations in stock exchange filings.

As many as four directors resigned immediately, including Vice Chairman Chiang Shang-Yi, who had joined the company from Taiwanese chipmaker TSMC a little over a year earlier. SMIC’s potential has been shadowed even more by the news, which comes after the company was blocked by the US last year.

Zhou Zixue, the company’s former chairman, stepped down in September for personal reasons. The Shanghai Stock Exchange has also issued a regulatory notice to SMIC, revealing on Thursday that its supervising board had sent SMIC a letter of “supervision.”

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However, the course didn’t detail what that message meant or why it was sent. Nevertheless, investors were concerned by the news, and the company’s stock dropped about 4% in Shanghai and Hong Kong on Friday. There are now 11 directors on the board. Liang Mong Song, SMIC’s current co-CEO, is one of those leaving.

The business stated that Liang intends to stay on as an executive and that his resignation as a director allowed him to focus more on his C-suite responsibilities.

According to the company, Chiang has decided to spend more time with his family. However, according to Gao Yonggang, SMIC’s current chairman and chief financial officer, Chiang, will remain an adviser. In a regulatory filing, the remaining two directors stated that they had no problems with the board and were resigning to focus on other professional commitments.

Gao said the departures would “not have any significant impact on the company’s operations” in a call with analysts on Friday. Gao also said that the firm had no intentions to add any more directors in the foreseeable future, stating that the existing size of its board of directors was comparable to that of “other companies in the industry.”

Beijing has stated that it will develop its chip manufacturing technology. Last year, SMIC, which has many state-owned shareholders, said that it wants to invest in technology to keep up with its worldwide competitors. A request for more information from the company was not immediately returned.

“Since SMIC was located on an entity list by the United States, the company has suffered tremendous challenges in production and operations,” Gao told analysts on Friday.

Source: CNN News