China funds joint venture to accelerate 14nm
SMIC, which has lagged other foundries in bringing up 28nm CMOS production, is at risk of falling behind in the manufacturing process race as foundry leader TSMC is already at 10nm and contemplating 7nm production using extreme ultraviolet lithography.
SMICs funding is being done by the creation of a joint venture called SMSC and held by SMIC with 50.1 percent and 27.04 and 22.86 percent by China IC Fund and Shanghai IC Fund, respectively.
The goal is to obtain about $10 billion to fund the operation. Initially China IC Fund and Shanghai IC fund are putting in $946.5 million and $800 million in cash respectively. SMIC will owe $1.5435 billion bringing the registered capital of SMSC to $3.5 billion.
The additional $6.5 billion will be obtained through debt funding SMIC said.
SMSC is the 300mm wafer fab being built in Shanghai to house its 14nm and below R&D and mass production. When facilitized the fab is expected to have a manufacturing capacity of 35,000 wafer starts per month.
In a statement SMIC said the use of the joint venture mechanism and government funds would speed up the introduction of advanced manufacturing processes and products while relieving the company of the need to spend large amounts of cash and reporting depreciation caused by the expansion of advanced production capacity.
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