China's SMIC to build USD 8.8 billion chip facility in Shanghai

Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC) is planning to set up a new chip product line in Shanghai worth USD 8.87 billion, as part of China's ambitions for semiconductor self-sufficiency, the Wall Street Journal reported, citing a regulatory filing. The facility will be built through a joint venture with the Shanghai government's Lin-Gang Free Trade Zone Administration and specialise in 28-nanometer and higher process nodes. When complete, it will produce 100,000 12-inch wafers per month.

The joint venture will have a registered capital of USD 5.5 billion. The remaining funds will be raised through third-party investors, SMIC said.

A number of companies are looking to increase their chip product, to both increase national self-sufficiency and meet demand for chips amid supply shortages. Intel announced last March that it will be investing USD 20 billion into boosting US production and making chips. The company is also reportedly trying to acquire semiconductor maker Global Foundries for about USD 30 billion, reports said in July. Global Foundries itself said it has plans to build a second factory in New York State.

South Korea said in May that it will provide massive tax incentives and state subsidies to chip manufacturers, to encourage them to invest USD 453 billion by 2030. Samsung announced that same month that it will increase investments in its foundry business.

China has been trying to increase domestic manufacturing of chips amid US export restrictions. Chinese chipmaker SigmaStar is mulling an IPO that could raise at least USD 780 million.