SMIC… What can you say about this company, which launched with such fanfare a decade ago and then went on to flounder for much of its short life before white knight David Wang came in to turn it around? The turnaround story has reached an important milestone, with SMIC posting its third consecutive quarterly profit and first profitable year in quite some time. But let’s not forget the entire industry has been riding high these days, and Wang has warned on several occasions that SMIC’s own fortunes could slumpl if the notoriously cyclical sector falls back on slow times, which is inevitable. First quarter guidance hardly looked encouraging, with margins and revenue both forecast to slip. And yet Wang said he wants to boost revenue for the year by 20 percent. Something is out of whack here, though I suspect the company is growing conservative in case things start to head south, which isn’t at all clear yet. Given the company’s decent track record in Wang’s first year in office, I’d say it’s too early to write off SMIC’s comeback, and these guys deserve a chance to show they’ve got what it takes to compete with the big boys.
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