SMIC to build new wafer plant in Shanghai

Together with two partners, Semiconductor Manufacturing International Corporation (SMIC) will build a new wafer plant in Shanghai's Lingang area with a total investment of US$8.9 billion to meet booming chip demand, the Chinese mainland's biggest chipmaker said on Friday.

SMIC posted a record high net profit in the third quarter, and expects chip shortages to continue in 2022.

The Shanghai-based company along with China IC Fund II and Hailinwei entered into the Lingang Joint Venture Agreement to build the facility, with a registered capital of US$5.5 billion. SMIC agreed to contribute US$3.66 billion, or 66.5 percent, with China IC Fund II and Hailinwei ponying up 16.8 percent each, according to SMIC. SMIC is now listed both in the Shanghai STAR Market and Hong Kong.

SMIC is the biggest listed firm in the innovation-oriented STAR Market, and a flagship firm in the Chinese integrated circuit market.

In the third quarter, SMIC posted revenue of US$1.4 billion, 30.7 percent growth year on year. Its gross profit was US$46.8 million, 78.6 percent higher than a year ago.

In the fourth quarter, SMIC expects revenue to increase by 11 to 13 percent quarter on quarter, with a gross margin ranging between 33 and 35 percent.

SMIC continues to face challenges since being placed on the "Entity List" by the United States.