The cracked paint on the ceiling and dim light filtering into the empty hall convey a sense of defeat that mirrors the story told by the company's balance sheet.

SMIC, China's largest chipmaker, is not alone in its suffering. Almost a decade after Beijing decreed the establishment of a semiconductor industry of its own, the country's chipmakers are still struggling to compete with their established multinational peers or even to turn a profit.

Now the global economic crisis is deepening their woes. On Friday, SMIC said that its net loss in the fourth quarter of 2008 had doubled from a year earlier to $124.5m on a 31 per cent drop in revenue from the same period in 2007. In the current quarter, revenue is expected to drop by another 50 per cent, said Richard Chang, its chief executive.