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China Pumps US$22.5 billion into its Chipmaker SMIC

Semiconductor Manufacturing International Corporation (SMIC), headquartered in Shanghai and incorporated in the Cayman Islands, is a Chinese semiconductor foundry company. On May 15, the Hong Kong-listed chip maker announced that two China state-backed funds injected a total of US$22.5 billion into its wafer factory that will help SMIC produce advanced chips.

As the Trump administration has moved to block global chip supplies to blacklisted telecoms equipment giant Huawei Technologies, which is gradually shifting its own wafer design and production from Taiwan based TSMC to SMIC in response to the possibility of more restrictive measures, China is betting the local chip foundry can help reduce the country’s reliance on US technology.

The plant has the capacity to produce 6,000 14-nanometre wafers a month and plans to boost that to 35,000. After the capital infusion, the SMIC plant’s registered capital jumped from US$3.5 billion to US$6.5 billion. The chip maker’s stake in the facility will drop from 50.1 per cent to 38.5 per cent, according to the company.

Source: Central News Agency, May 17, 2020