The big picture: SMIC is one of several chip makers that are part of China's plan to become more self-sufficient and create a global semiconductor industry. The company plans to one day compete with companies such as Samsung and TSMC, but at the same time cautiously increases the production capacity of mature processing technologies used in various applications.
China's largest foundry announced today that as part of an ambitious project to increase capacity and challenge companies such as Samsung, Taiwan Semiconductor Manufacturing Corporation (TSMC), a factory that produces chips in Shanghai. and GlobalFoundries. To that end, SMIC says it will commit at least $8.87 billion to the project and has already signed an agreement with a Shanghai-backed government to build new free facilities in the city. The business district receives more than half of the budget from SMIC itself and about 25 percent from the Lin-Gang Special Zone office.
< p> When the factory is working at full capacity, its production capacity is 10,000 wafers per month. The plan is to make chips using 28nm and older processing nodes, as SMIC has not yet mastered the lower 14nm process technology and the Chinese government has not yet been able to guarantee advanced EUV equipment from ASML. Larger nodes are based on more mature technology suitable for the production of wireless chips, microcontrollers, image sensors and display driver chips. As we've seen in the past 12 months, the lack of components like regular $1 drivers can have a huge impact on the price and availability of everything with the display. SMIC, which owns several chip factories in Beijing, Tianjin and Shenzhen, is also working on 14nm and 12nm high-end processing nodes, but the progress in volume production has been slow so far, the contracts are very small. In June, the Chinese company said it was confident that the performance issues could be resolved by the second half of 2022. The latest chip production equipment is from Japan. SMIC's latest move may help the country become more self-reliant, especially with yet another trade war raging between it and the United States.
SMIC China spent $8.87 billion to build a new chip factory in Shanghai