China's Semiconductor Manufacturing International (SMIC) has struck a deal with the Beijing Economic-Technological Development Area Management Committee (BDAC) to form a JV fab that will focus on the manufacture of chips built using 28nm and above process technologies.

In a filing published by SMIC with the Shanghai Stock Exchange (SSE), the JV fab is designed for production capacity of 100,000 12-inch wafers monthly when the first phase of its establishment completes. Adjustments will be made to the monthly capacity in the second phase based on market demand.

The JV fab will be set up with an initial capital of US$5 billion, of which 51% will be funded by SMIC. The fab will be run by SMIC, but owned jointly by SMIC and third-party investors that will be assigned by BDAC, according to the filing.

The JV fab is expected to draw a total of US$7.6 billion worth of investment in its first-phase establishment, SMIC disclosed in the filing.

SMIC is the largest China-based pure-play foundry, and has recently moved its most advanced 14nm FinFET process to volume production. Sales generated from 14nm process technology accounted for 1.3% of SMIC's total wafer revenue in the first quarter of 2020, up from 1% in the prior quarter.

SMIC is scheduled to hold its quarterly conference call on August 7 to discuss its performance in the second quarter and provide a business outlook.

By: DocMemory
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