Strategy Study For SMIC

It is well known that IC (integrated circuit) industry is a promising high tech industry. Global economy and technology have been propelled by IC industry for recent decades. IC manufacturing, which is the most important technology in IC industry chain, is mostly called wafer foundry. However, SMIC is the leader in Chinese wafer foundry industry. With wafer foundry industry growing to be more and more competitive, it is urge for SMIC to develop its new strategy.Through PEST and Five-powers Model analysis, this paper studies wafer foundry industry's outer environment first. Secondly, this paper analyzes SMIC's capabilities through tangible resource, financial resource, human resource and marketing ability, manufacturing ability, technology ability and managerial ability. The author put through SWOT analysis whereafter and concludes that SMIC should fully utilized government's favorable policies to expand its manufacturing capacity and enhance its technology ability. What is more, SMIC should developing and increasing market share, especially the niche markets TSMC and UMC not touched, The article suggest that SMIC should adopt target concentration strategy afterward.Last but not least, this paper discussed how SMIC should execute its strategy:(1) Emphasize on digesting and absorbing the introduced technology and enhance technology ability; (2) Build up and integrate marketing organization and teams, improve marketing ability; (3) Enlarge manufacturing capacity, improve yields, improve manufacturing ability; (4) Establish motivation system and improve managerial capacity; (5) Cooperate with local government and colleges, improve employee's competence.