Shanghai, China – SMIC, China's largest semiconductor foundry, has reported its highest quarterly revenue, defying US sanctions imposed on the company. The surge in revenue can be attributed to a significant increase in sales of older-generation (legacy) chips within the Chinese market.

According to Reuters, SMIC's revenue for the third quarter (July-September) jumped 34% year-on-year to $2.17 billion. This marks the first time the company has exceeded $2 billion in quarterly revenue. Net profit also climbed 58.3% year-on-year to $148.8 million.

SMIC had already overtaken Taiwan's UMC in the first quarter to become the world's third-largest foundry, behind TSMC and Samsung Electronics.

The company's strong performance in the third quarter is largely due to increased demand for older-generation chips used in consumer electronics within China. In fact, China accounted for 86.4% of SMIC's total revenue in the third quarter, up from 84% in the same period last year. Conversely, the company's revenue from the US, Europe, and other Asian regions declined.

Reuters reported that SMIC is increasingly focusing on Chinese customers rather than global clients.

Other Chinese semiconductor companies, such as Hua Hong Semiconductor and NEXCHIP, have also reported strong third-quarter results despite US sanctions.

As a result, there is growing speculation that US President-elect Donald Trump will intensify controls on China's semiconductor industry upon taking office.

Michael McCaul, chairman of the US House Foreign Affairs Committee, recently urged the US Commerce Department to investigate SMIC for violating US export control laws. McCaul called for an investigation into SMIC's facilities to determine if the company is illegally producing chips for Huawei.