Semiconductor Manufacturing International Corp. (SMIC) and Qualcomm, China's largest foundry and the world's leader in cellular base band processors, revealed Thursday that they are working together on 28nm wafer production in China.

Under the agreement, Qualcomm will offer support to accelerate SMIC's 28nm process maturity, while SMIC will make Qualcomm's latest Snapdragon processors on 28nm node, both PolySiON (PS) and high-K dielectrics metal gate.

With its future growth dependent on the advancement of its 28nm technologies, the deal marks a big win for SMIC.

Less clear is what advantages this will give to Qualcomm, other than mending the company's relationship with the Chinese government.

SMIC isn't exactly known for cutting-edge process technologies, compared to other foundry giants.

Indeed, in an exclusive interview with EE Times last March, Tzu-Yin Chiu, SMIC's CEO acknowledged a broadening technology gap with Taiwan Semiconductor Manufacturing Co. (TSMC). At a time when leading fab owners are busy talking about a 14nm process node, SMIC's CEO then said that its 28nm process node is "now frozen," allowing potential customers to test and verify SMIC's newest node.

Since China launched an antitrust probe into Qualcomm late last year, speculation abounds that Chinese authorities are probing ways to coerce Qualcomm into collaborating with their electronics industry.

Qualcomm reportedly faces penalties that may exceed $1 billion. The National Development and Reform Commission (NDRC), China's main planning body, raided Qualcomm's Beijing and Shanghai offices last year.

The NDRC has used the anti-monopoly law to target technology companies for practices that could lead to what it calls "unreasonably" high prices. In February, the Chinese regulator said it suspects Qualcomm of overcharging and abusing its market position.

When asked where the NDRC's antitrust investigation stands today, Christine Trimble, Qualcomm's VP of public affairs, told press, "We continue to fully cooperate with the NDRC and have no further comment."

Qualcomm is also saying very little about the deal with SMIC. Asked about which Snapdragon processors SMIC will make and when Qualcomm expects production to start, the company spokesman said, "We're not disclosing any details."

When questioned why Qualcomm decided to pick SMIC as its foundry partner in China, the spokesman spoke in boilerplate: "Qualcomm has been collaborating with SMIC several years and this announcement represents an extension of this relationship to the 28nm technology node."

In contrast, SMIC is much more willing to disclose the company's future plan with Qualcomm.

By: DocMemory
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