Hua Hong Semiconductor, China’s No 2 contract chip maker, which reported record revenues for the first half on rising demand from the United States, is more worried by a weakening yuan rather than the trade war. “So far we have not heard concerns on the trade war from our customers,” said Wang Yu, President and Executive Director of the company. “But we are cautious about it and are closely monitoring the situation to see if there will be any impact.” The sharp depreciation of the yuan, on the other hand, is a more sensitive issue, he told analysts, as its raw materials were priced in U.S. dollars. The yuan has fallen roughly 9% against the U.S. dollar since March.

Revenues in the first half rose 15.4% year-on-year to a record USD440 million while profit attributable to owners jumped 25.5% to USD85.9 million in the same period. For the second quarter alone, revenues rose 16.1% year-on-year to USD230 million, beating a Bloomberg consensus of USD225.1 million. Revenues from the U.S. grew 27% year-on-year in the second quarter to USD39.8 million on increased demand. Three of Hua Hong Semiconductor’s top five customers are American – Cypress Semiconductor, Microchip Technology and ON Semiconductor. Wang also said the company had secured enough supplies, including wafers and other materials, to make sure its foundries are not affected by supply constraints in the second half amid rising demand from customers. He also expected revenue to grow in the third quarter by 13% to 14% year-on-year.