SMIC Build USD2.35 Billion Chip Foundry in Shenzhen With Government Funding - Pi...

SMIC Build USD2.35 Billion Chip Foundry in Shenzhen With Government Funding

SMIC Build USD2.35 Billion Chip Foundry in Shenzhen With Government Funding

March 19, 2021 1:53 pm

Beijing (PingWest)-Semiconductor Manufacturing International Corporation (SMIC), China’s largest chip maker, has inked an agreement with Shenzhen government to build a new wafer fabrication plant in the city that will cost USD2.35 billion.

According to an exchange document filed by SMIC, SMIC Shenzhen, the operator of the project, is 55% owned by SMIC and 23% owned by Shenzhen government backed Shenzhen Major.

SMIC Shenzhen will focus on manufacturing chipmaking technologies of 28-nanometer and above, with the goal of producing 40,000 12-inch wafers per month, according to the exchange filing.

The 28-nm node, introduced by Taiwan Semiconductor Manufacturing Corp (TSMC) in 2011, begun mass production for smartphones three years later. In August 2015, SMIC announced it was using 28-nm technology to manufacture Snapdragon 410 processors for US chip giant Qualcomm.

The new project will fuel the growth of Shanghai-based SMIC, which was blacklisted by the United States in December.

The blacklist will bar SMIC from receiving specific goods made in the United States, and will restrict US investors from buying shares of SMIC starting next year.

U.S asset managers Vanguard Group and BlackRock Inc together own roughly 4% of outstanding shares of SMIC.

The new project come at the time when covid-19 pandemic is wreaking havoc on supply chain and setting up a shortage of chips.

SMIC’s co-CEO Zhao Haijun said last month that SMIC could not meet customer demand for certain mature technologies and its plants have been running fully loaded for several quarters. SMIC makes chips for clients such as Huawei and other smart device makers. The chips are widely used in smartphones, TVs, cameras, home appliances, industrial devices and in the automotive industry. The Huawei Kirin 710A is now in commercial mass production and comes pre-installed with the Pride Play4T.

In June 2019, SMIC delisted from the New York Stock Exchange after trading there for 15 years, but the company kept its listing in Hong Kong Stock Exchange.

In mid May 2020 , SMIC received USD2.25 billion of investments from a clutch of Chinese state investors, that will be used to fund expansion of a facility in Shanghai. The investment came in as China seeks to become self-reliant in the sector of semiconductors, China is investing in massive amount of capitals and issued tax incentives to support the home-grown chip companies.

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