SMIC's joint venture to invest US$7.6 billion

SMIC, the Semiconductor Manufacturing International Corp, has announced a joint venture to invest US$7.6 billion in a new plant to improve capacity, the Chinese mainland’s biggest chipmaker said on Saturday.

SMIC, which recently listed on the Shanghai STAR Market, has signed a deal with the Beijing Economic Technological Development Area to establish a joint venture. The JV will invest US$7.6 billion to build a wafer plant with 28-nanometer or more advanced technologies, the company said in a statement to the Shanghai Stock Exchange. 

The JV’s registered capital was US$5 billion, with SMIC taking a 51 percent stake. In the initial phase, the wafer plant’s monthly capacity will be 100,000 units, according to the statement. 

The new JV and investment will help SMIC increase capacity and catch up market leader TSMC, industry insiders said.

SMIC’s share price surged in the STAR Market, making it the biggest company by market value on the innovation board.

SMIC raised 46.29 billion yuan in its initial public offering in the STAR Market, more than double its initial target and a record high in IPO value for the board.

The IPO funds raised will be used for SMIC’s latest 12-inch wafer plants and technology research, the Shanghai-based chipmaker has said.