(Yicai Global) March 18 -- Semiconductor Manufacturing International, China's biggest semiconductor maker, will team up with partners to build a USD2.4 billion plant in Shenzhen to meet rising demand.
Shenzhen government's investment institution and a third-party investor will form a joint venture for the project that will produce 28-nanometer integrated circuit chips and above, the Shanghai-headquartered firm said in a statement yesterday. The project is expected to be ready next year.
This is not the first 28-nm project for the world's fifth-largest semiconductor chip foundry. SMIC penned an agreement with an economic and technological development zone in Beijing last July to produce these types of chips that Taiwan Semiconductor Manufacturing began making a decade ago. With an investment of USD7.6 billion, the plant is expected to be operational by 2024.
SMIC will have a 55 percent stake in the Shenzhen JV, and the city's Major Industry Investment Group will have up to 23 percent of the equity. The plant is expected to be able to make 40,000 12-inch wafers a month.
The chipmaker expects to expand its production scale and seize policy opportunities that the Shenzhen government offers to develop the local IC industry and thus provide investors with higher returns, according to the statement.
SMIC's Shanghai-listed shares [SHA:688981] climbed by 0.5 percent to CNY59.01 (USD8.60) this afternoon. Its Hong Kong-listed stock [HKG:00981] rose by 0.6 percent to HKD26.65 (USD3.40).
Editor: Emmi Laine, Xiao Yi