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SMIC
TechTech War

US-China tech war: China’s biggest chip maker SMIC facing possible delays at new Shenzhen plant due to US restrictions

  • SMIC reported US$1.1 billion in revenue for the first quarter this year, up by 22 per cent from the same period a year earlier
  • Co-CEO Zhao said restrictions on the company’s supply chain created ‘a lot of uncertainties’ in operational continuity and further capacity building

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Pedestrians walk past SMIC headquarters in Shanghai, China, on Tuesday, March 23, 2021. Photo: Bloomberg
Che Pan
Semiconductor Manufacturing International Corporation (SMIC), the world’s fourth-largest foundry and China’s most advanced chip maker, said it may face delays at its new plant in Shenzhen due to US restrictions, co-CEO Zhao Haijun said at a conference call on Friday.
Zhao said the company’s Shenzhen wafer fabrication plant, a joint venture between SMIC and the Shenzhen government, may experience some delays in equipment deliveries due to US restrictions.

“The plant has been built and the fab is expected to come into production in the coming year, however, there may be some delay for equipment to reach production considering the impact from the Entity List,” Zhao said, referring to the US export control list that bars the company from accessing certain technologies.

SMIC was added to the US trade blacklist last December, which hindered its ability to carry out research and development of advanced processes smaller than 10 nanometre.

“We are still going through the process, according to the regulations, on compliance and our suppliers put in a lot of effort to [get approval for shipments], but uncertainties [over licenses] remain,” he added. “We have seen a lot of positive progress … the things we see now are much [more] positive compared to those in the last conference call, but we still can’t rule out all the uncertainties.”

The Shanghai-based company announced in March that it entered into an agreement with the Shenzhen government to build a new wafer fabrication plant in the southern tech hub. SMIC Shenzhen will focus on mature chipmaking technologies of 28-nm and above, with the aim of producing 40,000 12-inch wafers per month. It was scheduled to start production in 2022.

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