Top China Chipmaker SMIC to Invest $7.5 Billion to Build New Plant

What’s new: Semiconductor Manufacturing International Corp. (SMIC) announced plans to build a 12-inch wafer production line in Tianjin municipality with an investment of $7.5 billion, according to a Friday exchange filing.

As the largest contract chipmaker on the Chinese mainland, SMIC (688981.SH/00981.HK) said the new plant would have a production capacity of 100,000 wafers per month, which can provide foundry and technical services for technology nodes ranging from 28nm to 180nm.

The context: Global chipmakers have scrambled to expand production capacity over the past two years amid strong demand for semiconductors from clients including carmakers and smart phone makers.

Earlier this year, SMIC began building a new plant in Shanghai and two plants that are under construction in Beijing and Shenzhen will start operation at the end of the year, Chief Executive Officer Zhao Haijun said in February.

The company’s overall production capacity will double after construction of the three projects are completed and they are operating at full capacity, said Zhao.

Although the semiconductor market showed some signs of cooling this year, SMIC’s production expansion would not result in excessive supply given its relatively small market share compared to global giants, Zhao said at the half-yearly earnings conference this month.

Related: China’s Top Chipmaker Achieves Breakthrough Despite U.S. Curbs

Quick Takes are condensed versions of China-related stories for fast news you can use.

Contact reporter Guo Yingzhe (yingzheguo@caixin.com)

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