SMIC CEO voted off board, stock trading suspended
- 01 July, 2011 07:10
Chinese chip maker Semiconductor Manufacturing International on Thursday requested its shares be suspended from trading as the company's CEO David Wang was voted off the board.
SMIC requested a halt in the trading of its stock "pending the release of price sensitive information," according to a regulatory filing. The company did not return requests for comment on reasons for the request.
SMIC is the fourth-largest contract chip maker behind Taiwan Semiconductor Manufacturing Co. (TSMC), United Microelectronics Corp. (UMC) and GlobalFoundries.
Around 58 percent of SMIC's shareholders voted for Wang to be removed from the board, the company said on Tuesday in a separate filing. Wang was appointed the company's CEO in November 2009 after former CEO and founder Richard Chang left the company to pursue personal interests.
SMIC returned to profitability under Wang after many years of losing money. However, the company is continuing to struggle in the wake of competition from larger companies such as TSMC, said Bill McClean, president of IC Insights.
It is hard to tell why Wang was being voted off the board, but there may be some concerns about the company's performance, McClean said.
The foundry business is very difficult and companies are struggling to adjust. There was a management shakeup last month in GlobalFoundries, which announced that Doug Grose had stepped down as CEO and would be replaced by Ajit Manocha, who was previously vice president of operations at memory company Spansion.
TSMC is technologically more advanced than SMIC, which is key in attracting customers, McClean said. SMIC has said it would implement the 40-nanometer manufacturing process by the end of the year, while TSMC is already manufacturing chips in volume using the 40-nm process.
Being based in China is also a challenge for SMIC in attracting customers, McClean said. China is notorious for not protecting intellectually property, and companies are concerned about sending their products for manufacturing to the country.
Earlier in the week SMIC also announced that the company's chairman, Jiang Shang Zhou, had passed away.