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SMIC: Chip manufacturing is in short supply, plans to expand 12-inch and 8-inch wafer production capacity

On July 7, SMIC responded to investors’ questions on the “SSE e-interaction” platform, saying that the company’s integrated circuit chip manufacturing is currently in short supply, and the overall capacity utilization rate in the first quarter reached 98.7%. According to the company’s CAPEX spending plan this year, it plans to expand the production capacity of 10,000 12-inch and 45,000 8-inch wafers.

SMIC: Chip manufacturing is in short supply, plans to expand 12-inch and 8-inch wafer production capacity

Statistics show that in the first quarter of 2021, SMIC achieved operating income of 7.292 billion yuan, a year-on-year increase of 13.92%; net profit attributable to the parent was 1.032 billion yuan, a year-on-year increase of 136.39%. According to the announcement, SMIC’s second-quarter 2021 results will be released after the close of trading on the Hong Kong Stock Exchange and Shanghai Stock Exchange on August 5, 2021 (Thursday). The results presentation meeting will be held on Friday, August 6, 2021.

Since the fourth quarter of last year, with the surge in demand for downstream chips, the global foundry capacity has continued to be in short supply. Major fabs have built new fabs or expanded production on the basis of existing factories to cope. International is no exception, and started its capacity expansion plan early.

Zhejiang Daily reported that SMIC Shaoxing, located in Shaoxing, Zhejiang, successfully completed the debugging of the wafer equipment chain. The monthly production capacity of 8-inch wafers increased to 70,000 pieces, with a yield rate of 99%. At present, the most widely used in the semiconductor field are 8-inch and 12-inch wafers. SMIC Shaoxing successfully mass-produced 8-inch wafers, which can be used in chip manufacturing for smart cars and smart home appliances.

In February this year, one of the 129 centrally signed projects in the “two districts” of Beijing Economic and Technological Development Zone – the first phase of the SMIC Jingcheng 12-inch integrated circuit wafer and integrated circuit packaging project (hereinafter referred to as “SMIC Jingcheng Phase I”) Engineering Project”) is in full swing. The total investment of the project is about 49.7 billion yuan. It will be constructed in two phases. The first phase of the project is scheduled to be completed in 2024. After completion, it will reach a monthly production capacity of about 100,000 12-inch wafers. From the statistics of its shareholder information, it can be seen that SMIC Holdings Co., Ltd. is the largest shareholder of SMIC Jingcheng, holding 51% of the shares; National Integrated Circuit Industry Investment Fund Phase II Co., Ltd. and Beijing Yizhuang International Investment Development Co., Ltd. each hold 24% of the shares. .49%, 24.51%.

In March this year, SMIC issued another announcement and signed a cooperation framework agreement with the Shenzhen Municipal People’s Government. The two parties agreed that SMIC and the Shenzhen government (through the Shenzhen Reinvestment Group) (among others) would make a proposed capital contribution through SMIC Shenzhen. Carry out project development and operation.

According to the plan, SMIC Shenzhen will carry out the development and operation of the project, focusing on the production of 28nm and above integrated circuits and the provision of technical services, aiming to achieve a final monthly production capacity of about 40,000 12-inch wafers. Production is expected to start in 2022. After the final agreement is signed, the new investment in the project is estimated to be US$2.35 billion. The actual capital contribution of the parties will be determined based on the evaluation of SMIC Shenzhen by a third-party professional company. It is expected that upon completion of the Proposed Capital Contribution, SMIC Shenzhen will be owned as to approximately 55% and not more than 23% by SMIC and Shenzhen CIC Group respectively. SMIC and the Shenzhen government will jointly promote other third-party investors to complete the remaining contributions.

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