Chinese semiconductor maker SMIC plans US$3.59 billion Beijing plant

Semiconductor Manufacturing International Corp (SMIC), China's largest semiconductor foundry, has signed a contract to participate in a US$3.59 billion joint venture in Beijing, the Hong Kong-listed firm said yesterday.

Of the US$3.59 billion, SMIC and its wholly owned subsidiary, SMIC Beijing, will invest US$660 million and hold a 55 per cent stake in the business, which will design, manufacture and sell semiconductor wafers.

Two firms owned by the Beijing government, Beijing Industrial Development Investment Management and Zhongguancun Development Group, will invest US$540 million and hold the remaining 45 per cent.

The remaining investment capital will come from loans, the joint venture's cash flows and future contributions from the joint venture's shareholders.

"The joint venture is expected to build up significant manufacturing capacity with a focus on 45-nanometre [integrated circuits] and aims to reach a manufacturing capacity of 35,000 wafers per month," SMIC said.

BOC International analyst Tony Yang said it would take two to three years for the Beijing facility to make a significant contribution to SMIC's revenue as the plant needed time to improve its yield.