SMIC to Build 28nn Chip Production Line in Shanghai worth $8.8 Billion

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(Source: Shutterstock)

On September 2, Semiconductor Manufacturing International Corporation (SMIC) announced that it signed a cooperation agreement with Shanghai’s Free Trade Zone Lin-Gang Special Area Administration. The two sides have agreed to set up a joint venture and plan to build a 12-inch wafer foundry production line project with a production capacity of 100,000 wafers/month.

The program will attract $8.87 billion USD of investment. The joint venture has a registered capital of $5.5 billion USD, more than 51% from SMIC, and no more than 25% by the investment agencies assigned by Shanghai Municipal People’s Government. The joint venture will focus on providing integrated circuit wafer foundry and technical services with nodes of 28nm and above.

SMIC and the Lin-Gang Special Area A will work together to attract third-party investors to provide the rest of the capital, and then adjust their respective capital amounts and equity ratios in line with capital from third-party investors. SMIC is responsible for the operation and management of the joint venture.

The announcement says this cooperation intends to seize the strategic opportunities for the development of the integrated circuit industry in Lin-Gang’s Free Trade Zone and further develop the business. SMIC thinks the project is conducive to escalating production scale and upgrading nanotechnology services, thereby bringing higher returns.

Jiemian News reports SMIC now has a 200mm fab in Shanghai, and a 300mm advanced process joint venture fab under its management; a 300mm fan and a 300mm fan under its holding in Beijing; and a 200mm fab in Tianjin and Shenzhen.

SEE ALSO: Leading Chinese Chip Maker SMIC Records Stellar H1 2021 Growth, Despite Sanctions

In February this year, the list of major construction projects in Shanghai in 2021 was published by the Shanghai Development and Reform Commission. SMIC’s 12-inch chip SN1 program is on the list and is now under construction. It is reported that the total investment of the project is $9.059 billion, with a planned monthly production capacity of 35,000 pieces. This program will build Chinese mainland’s first FinFET process production line.

As of the morning of September 3, shares of SMIC closed at HK$24.2, up 1.04%, with a total market value of HK$191.2 billion ($24.599 billion).