LONDON – As expected Semiconductor Manufacturing International Corp. (Shanghai, China) has announced plans to form a joint venture in Beijing, China, as part of its expansion of manufacturing in the capital.
SMIC and its subsidiary SMIC Beijing are entering into the joint venture with Beijing Industrial Development Investment Management Corp. (BIDIMC) and Zhongguancun Development Group (ZDG). SMIC will be responsible for managing the daily operations of the joint venture called Northern SMIC Semiconductor Manufacturing (Beijing) Co. Ltd., according to reports.
BIDIMC is a state-owned company with all its capital contributed by Beijing State-owned Assets Management Co., Ltd. ZDG represents the Zhongguancun Science Park in Beijing.
The total investment for Northern SMIC is estimated to be $3.59 billion with an initial capitalization of $1.2 billion contributed by the parties in the form of registered capital. Of the initial funding SMIC and SMIC Beijing have agreed to contribute $660 million or 55 percent and ZDG and BIDIMC are set to contribute 45 percent or $540 million. The remaining money is to be funded through loans, further funding and cash flow, SMIC said.
A year ago, in May 2012, SMIC announced it had reached a deal to establish a joint venture to execute on SMIC Beijing's second phase of expansion. At that time SMIC said the deal would result in a wafer fab to be located adjacent to SMIC Beijing's 300-mm wafer fab in Beijing.
The latest announcement did not explicitly mention a wafer fab but said that "depending on the environment in which the joint venture company operates and market conditions," the joint venture is expected to establish and build up a manufacturing capacity of 35,000 wafer starts per month with a focus on 45-nm and finer technologies.
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