SMIC wins backing from State-owned investors

Source:Global Times Published: 2018/4/26 21:13:41

Shanghai-based semiconductor producer Semiconductor Manufacturing International Corp (SMIC) announced in a statement to the Hong Kong Stock Exchange on Tuesday that the company reached an agreement with the State-owned China Integrated Circuit Industry Investment Fund and Datang Telecom (DTT) to raise $659 million through an issue of new shares.

After the capital increase, the two parties will each hold a total stake of 18.3 percent in SMIC.

SMIC is the largest semiconductor manufacturer in China, with revenue of $3.1 billion in 2017.

The move shows the Chinese government's commitment to support the national semiconductor industry after the US Commerce Department announced sanctions banning US companies from selling their products to Chinese company ZTE.

While China has come to dominate much of the world's IT production, Chinese manufacturers still rely heavily on imported semiconductors.

China imported $260 billion in chips in 2017 and another $70 billion in just the first quarter of 2018, according to data from the General Administration of Customs.

The US ban on ZTE caused shockwaves in China's high-technology manufacturing industry, galvanizing existing efforts by the government and domestic companies to expand the national chip industry and avoid overreliance on foreign suppliers.

The integrated circuit fund, set up in 2014, has invested 119 billion yuan ($18.8 billion) to date in domestic chip companies, with a yearly growth rate of 21 percent.

On Wednesday, the Ministry of Industry and Information Technology formally announced that the fund is raising money for a second round of investment, and it welcomed domestic and foreign companies to participate.

Posted in: INDUSTRIES,COMPANIES

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