Why Goldman Is Siding With China on This Huawei Play
Analysts are split over the future of SMIC, a semiconductor foundry that supplies the tech giant. So far, the believers are winning.
National champion or collateral damage. What do you see?
Photographer: Qilai Shen/Bloomberg
From Seoul to Taipei, large-cap companies are treated with reverence, boasting almost uniform buy recommendations from brokerage analysts. But in Hong Kong, a Chinese semiconductor foundry, which has gained over $7 billion in market cap this year, is stirring up controversy and splitting Wall Street titans.
I’m talking about Shanghai-based Semiconductor Manufacturing International Corp., which counts Huawei Technologies Co. as its largest client. Of the 33 sell-side analysts tracked by Bloomberg, only 14 have a buy rating, with the rest an outright sell or hold, which in the analyst world amounts to a polite no.