Advertisement
SMIC
TechTech War

China’s top chip maker SMIC to build a US$9 billion factory in Shanghai amid Beijing’s push for tech self-sufficiency

  • Semiconductor Manufacturing International Corporation is pouring US$8.87 into a new chip fabrication plant in Shanghai’s free-trade zone
  • The company has other plants planned for Beijing and Shenzhen as Beijing seeks to advance the country’s semiconductor industry

Reading Time:2 minutes
Why you can trust SCMP
1
SMIC is building a US$9 billion plant in the Shanghai free-trade zone, adding to plans for new fabs in Beijing and Shenzhen as China pushes to advance its semiconductor industry. Photo: Bloomberg
Che Pan
China’s top chip foundry Semiconductor Manufacturing International Corporation (SMIC) announced plans to build a new US$8.87 billion factory in Shanghai as it ramps up production to address the global chip shortage.
Advertisement
The company, which is listed in Shanghai and Hong Kong, said in a corporate filing on Friday that it has signed an agreement with a Shanghai government-backed entity to build a new 28-nanometre fabrication plant in the city’s free-trade zone.
The expansion adds to existing plans for new chip fabs in Beijing and Shenzhen. The construction of those plants remains on track, SMIC said, despite lingering risks of restrictions on US-origin technology that prevent its acquisition of advanced chip-making equipment, including industry standard extreme ultraviolet lithography (EUV) machines made by Dutch company ASML.

Under the agreement, SMIC is partnering with the Pilot Free Trade Zone Lin-Gang Special Area Administration on a joint venture with registered capital of US$5.5 billion. SMIC will control 51 per cent of the venture, while an investment entity designated by the Shanghai municipal government will take 25 per cent. The pair will seek third-party investors for the rest of the stake, the statement said.

The new foundry will have a production capacity of 100,000 12-inch wafers per month. Sanctions are not expected to affect production, as technology related to 28-nm nodes and larger are not restricted by the US.

SMIC said the fab project can help it “meet the growing market and customer needs and promote business development”. The company also plans to use it to expand production and “advance nanotechnology services”.

Advertisement

Shanghai is considered the semiconductor capital of China, with SMIC and Shanghai Huahong Semiconductors, another leading chip maker, calling the city home. The city has also helped nourish many smaller chip design companies in recent years.

Advertisement