The world is grappling with the problem of chip shortages, and US sanctions have put Chinese companies in trouble for supplying chips. China, China’s largest chipmaker, SMIC, now wants to invest about $ 8.87 billion to build a new chip plant in Shanghai to try to solve its problems and increase its semiconductor market independence.
to the Reuters report, SMIC, the largest Chinese chip maker, wants to build a new production line in the Lingang Free Trade Zone in the Pudong District with a monthly production capacity of 100,000 12-inch wafers. The project will focus on building integrated circuits and implementing technologies specific to nodes 28 nm and above.
SMIC will partner with Lingang FTZ in this way and will be looking for more investors. Part of the SMIC shares are owned by the Chinese government and therefore have government support.
China has injected billions of dollars into SMIC in recent years to give the company a say in its rivalry with Japan, Korea and the United States, but SMIC is far behind its main competitors. The new SMIC plant is being announced shortly before they announced the construction of new plants in Shenzhen and Beijing.
SMIC is on the US government’s sanctions list and cannot use US-made technologies or cooperate with US companies. The company, along with Huawei, is seen as a threat to US national security, but both companies have repeatedly denied the allegations.
Sanctions have prevented SMIC from advancing its goals and plans to become one of the world’s top chipmakers, but these restrictions have not deterred SMIC’s operations, and the company continues to perform well financially. One of the effective factors in improving SMIC performance is the global chip shortage.
The Lingang Free Zone, which was chosen as the construction site of the plant, hosts the production lines of several other companies, including Tesla and Amperex Technology Co.