SMIC to Build A New Chip Plant in Shanghai with USD 8.87 Billion Investment
The new plant will expand company’s chip manufacturing capacity amid ongoing global supply shortage of chip
On 3rd September 2021, Chinese chip giant, Semiconductor Manufacturing International Corp. (SMIC), announced that it will invest USD 8.87 billion to build a new chip plant in Shanghai. The new plant will expand company’s chip manufacturing capacity amid ongoing global supply shortage of chip. The new plant will also boost Beijing’s push for independence in the sector.
Semiconductor Manufacturing International Corp. (SMIC) is China’s largest chipmaker and the announcement of the expansion has come as shortage of chip is sweeping across he automotive and electronics industries. Companies like Taiwan Semiconductor Manufacturing Corp Ltd. (TSMC), and GlobalFoundries have already announced expansion plans and SMIC is the latest to follow the trend.
Taiwan Semiconductor Manufacturing Corp Ltd. (TSMC) is one of the largest foundaries in the world and in July, it announced its intentions to spend USD 2.8 billon on expansion of its Fab 16 in Nanjing, China. GlobalFoundries is also in process of installing new equipment in its into its Fab 1 near Dresden, Germany. The company also initiated building of a new Fab in Singapore with investment of USD 4.5 billion and expansion of its Fab 8 complex in upstate New York this year.
SMIC announced that it has agreed to build a production line with monthly capacity of 100,000 12-inch wafers in the Lingang Free Trade Zone (FTZ) in the Pudong district of China's business hub. The Fab will be built by a join venture company with SMIC having 51% share, Shanghai Municipal People’s Government having 25%, and rest 24% share will be owned by a third-party. The registered capital of the joint venture will be around USD 5.5 billion.
SMIC was blacklisted by the US government late in 2020 as part of lengthy fight between Washington and Beijing over trade and numerous economic issues. The ban has made almost impossible for the company to procure equipment from American companies and it has slowed SMIC's production using its FinFET-based 14 nm fabrication processes and has also hampered its ability to develop 10 nm and sub-10 nm technologies.
Earlier this year, SMIC announced plans to build a 300-mm fab near Shenzhen with investment of around USD 2.35 billion. The company is expecting the plant to start operations sometimes in 2022. The fab will also be processing wafers using 28 nm and larger nodes, however, its production capacity will be around 40,000 wafer starts per month when fully ramped.