New | Chipmaker SMIC targets new foreign acquisition to bolster expansion

Semiconductor Manufacturing International Corp, China’s largest contract chipmaker, could be gearing up for another foreign acquisition to further expand its production capacity and drive new business from untapped market segments.

“After completing our LFoundry acquisition, we were approached by a number of [integrated-circuit foundry] players in Europe and Asia. They see SMIC as for real after that transaction.”

Shanghai-based SMIC bought a 70 per cent controlling interest in Italian contract chipmaker LFoundry for €49 million in June, marking its first purchase of an overseas-based semiconductor foundry.

That takeover was expected to add much-needed scale to SMIC’s production capacity amid the average 99 per cent utilisation rate at its Chinese fabrication plants, or fabs, over the past six quarters.

It would also pave the way for the company to enter and supply chips to the vehicle and industrial markets.