SMIC plans a new foundry in Shanghai for 8.87 billion dollars

The Chinese company Semiconductor Manufacturing International Corporation (SMIC) announced Friday (September 3rd) an investment of 8.87 billion dollars for the construction of a chip factory in Shanghai. The company, supported by the Chinese government which seeks to strengthen the independence of the sector, plans to increase its production capacities in a context of global shortage.

Up to 100,000 wafers per month

This investment represents a major expansion of its capabilities as China attempts to build a world-class chip manufacturing industry. This new factory project is in addition to that of a $ 2.35 billion foundry that SMIC plans to build in Shenzhen, in southern China, which will be able to produce up to 40,000 wafers. silicon of about 30 centimeters per month.

In Shanghai, SMIC signed an agreement to produce 100,000 cakes per month. The plant will focus on “mature” technologies of 28 nanometers or larger, the company said in a statement. These could be intended for the automotive industry, which is heavily affected by the global shortage of semiconductors, which it needs to power, among other things, electric vehicles and on-board systems.

SMIC plans to create a joint venture with the government to oversee the project. This will be majority owned by SMIC in partnership with Lingang FTZ. The company said it would seek other investors for the new entity with registered capital of $ 5.5 billion.

Facing US sanctions

SMIC now represents China’s best hope of establishing itself in the field of chips. By increasing its production capacity, the company could help Beijing cope with sanctions and efforts by the United States to curb its technological ambitions. However, its current technological expertise does not allow it to compete with market leaders, whether TSMC, Samsung or Intel. They focus on much more advanced manufacturing processes intended for smartphones or computers.

The United States had placed SMIC under sanctions last year for security reasons. The company could again be banned from equipment needed for production in the future, including industry-standard Extreme Ultraviolet (EUV) lithography machines made by Dutch company ASML.

But she doesn’t seem to worry about it. The company said the new factory will help it “meet the growing needs of the market and customers and promote business development,” reports the South China Morning Post. The brand new SMIC factory will be built in a free trade zone in the southeastern suburb of Shanghai that is part of the tariff-free zones approved by Chinese President Xi Jinping to attract foreign investment and trade.

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