SHANGHAI, May 11 Reuters Chinese chip maker Semiconductor Manufacturing International Corp SMIC on Thursday reported its first quarterly drop in revenue in more than three years, as the global chip sector struggles to work through an inventory glut.

Revenue in the JanuaryMarch quarter was 1.46 billion, down 20.6 yearonyear and in line with analyst estimates. Net profit fell 48.3 from a year earlier to 231.1 million.

SMIC executives attributed the drop to weak demand, following a yearslong chip shortage that led customers to build up excess inventories.

On an earnings call, SMIC coCEO Zhao Haijun said there was still a lack of clarity about prospects for recovery in the second half of the year.

Other chip companies have faced similar difficulties in recent months. A chip shortage that began in late 2020 caused a surge of demand for manufacturers like SMIC, but as sales of electronics slow, brands are now stuck with excess chip inventories.

Taiwan Semiconductor Manufacturing Co Ltd TSMC reported Q1 revenue down 5 from the year prior, while the chip division of Samsung Electronics Co Ltd reported a record loss of 3.4 billion in the same period.

In early October, the U.S. Department of Commerce released a sweeping set of export controls aimed at containing advancement among China39;s chip manufacturers.

The restrictions are further set to hamper SMIC39;s ambitions for making advanced chips, analysts say.

Nonetheless, it is rapidly expanding capacity across China,…