China’s leading chip manufacturer SMIC is building a new production facility

10. June 2021

The largest and also one of the most important Chinese chip manufacturers in China, Semiconductor Manufacturing International Corporation (SMIC), is building a new production facility in Shenzhen for 2.35 billion US dollars. The capital for the investment was provided jointly by the company and the local government of the city of Shenzhen. Shenzhen is known in China as a technology center and is home to companies such as Tencent and Huawei. By expanding chip manufacturing at SMIC, China hopes to strengthen its independence from other overseas manufacturers. In light of tensions with the U.S., it has been revealed that China, as the world’s second largest economy, is dependent on foreign technology in their chip industry.

 

 

SMIC can hope for full order books. The current global shortage of semiconductors has caused certain industries, such as the automotive industry, to turn to other suppliers. Cars don’t necessarily require the latest chips, one analyst told CNBC. SMIC could therefore supply those manufacturers with its slightly older chip technology, he said. The subsidiary that will operate the new Shanghai plant is mainly made up of 55 percent SMIC shares and 23 percent from a state-owned holding company. The remaining capital is contributed by private investors.

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