While China boasts over 30 working chip fabs, few are capable of producing wafers yielding the high performance, fine-line geometry ICs required for today's advanced cellphones, computers and consumer electronic devices.

SMIC's Beijing fab is meant to change that. It represents a bold gambit to alter the balance of power in the global semiconductor foundry market, a business that heretofore has been largely dominate by mostly Taiwan and Singapore suppliers.

At once a highly visible source of Chinese national pride, SMIC is also betting that the current ramp up in demand for foundry services in China, Asia and the rest of the world is a sustained boom that will prove SMIC right while allowing it to accelerate China's entry into the elite club of leading-edge chip makers.

As SMIC's latest SEC F-1 filing points out, it's not a strategy without extremely high risks.

Perhaps the most complex calculus in SMIC's risk management algorithm was its choice of the Chinese capital as the site of the nation's first 300-mm fab. Shanghai, Shenzhen and a dozen other cities scattered through out China are far closer to the epicenter of China's chip-consuming electronics manufacturing centers. But a state-of-the-art fab in Beijing, just like the Beijing Olympics in 2008, can potentially yield as much political capital and prestige as it can finished 300-mm wafers.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved