China’s Top Chipmaker Raises State Funding for $ 2.4 Billion Plant

The headquarters of Semiconductor Manufacturing International Corp. in Shanghai.

Photographer: Qilai Shen / Bloomberg

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Semiconductor Manufacturing International Corp. to build a $ 2.35 billion plant with funding from the Shenzhen government, the first major project to emerge from China’s master plan to catch up with the US and become more self-sufficient as global supply dwindles. chip.

SMIC warned on Thursday that the shortage could worsen this year and next and hit Chinese companies if the country does not increase domestic capacity now. The company has agreed to a joint venture with the southern municipality in which it will develop and operate a chip manufacturing plant that can produce silicon of 28 nanometers or more, it said on a stock exchange. presentation. The partners aim to attract third-party investment, start production in 2022, and eventually produce 40,000 12-inch wafers a month. Its shares rose as much as 3% in Hong Kong.

China wants to build a circle of tech giants that can stand shoulder to shoulder with Intel Corp. and Taiwan Semiconductor Manufacturing Co. While details of that effort won’t emerge for months, Prime Minister Li Keqiang has pledged to boost spending and drive cutting-edge chip research in the country’s final five-year goals, establishing a plan to compete for global influence with the US

“The shortage in chipmaking capacity is very real and the situation could deteriorate in 2021 and 2022 if Chinese companies do not accelerate expansion,” SMIC Senior Vice President Zhang Xin said at the SEMICON China conference in Shanghai. .

Beijing is moving quickly to cut dependence on the West for crucial components like chips, an issue that became more urgent after a global crisis. semiconductor shortages worsened during the pandemic. Washington has also blacklisted major Chinese tech companies, including SMIC, separating it from American technology, and at the same time severely impairing your ability to acquire the chip-making equipment you need. It’s unclear whether the Biden administration could allow US companies to resume large-scale sales to SMIC, or ease pressure from allies in Europe and elsewhere to protect the Chinese company.

Read more: How China’s Top Chipmaker Can Evade Trump’s Latest Offensive

Links with the government can be essential to achieving the country’s ambitions. Chinese chipmakers aim to advance beyond the more mature 28nm nodes, which are now used in industries ranging from car manufacturing to televisions, but need billions of dollars and years of trial and error to enter. to more sophisticated semiconductors for devices like smartphones.

Much of China’s hopes are based on advancing in burgeoning fields such as artificial intelligence and third-generation chips: made primarily of materials such as silicon carbide and gallium nitride, they can operate at high frequency and in higher-power environments and temperature, with wide applications in 5G, military grade radar and electric vehicles.


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