LONDON – SMIC has announced it plans to create a joint venture with Hubei Science & Technology Investment Group Co. Ltd. to invest in the Wuhan Xinxin Semiconductor Manufacturing Corp. 300-mm wafer fab.
SMIC is undertaking to provide $1 billion of capitalization to the un-named JV but said that the implementation of the JV may also be dependent on market conditions.
The move is in-line with a cooperation framework agreement made with the Wuhan East Lake Hi-Tech Development Zone Administrative Committee and signed in October 2010
and Hubei is a wholly-owned subsidiary of the Wuhan East Lake Development Committee.
The joint venture is split with Hubei having 33.3 percent of the JV and providing $500 million of capitalization and SMIC having 66.7 percent of the JV and providing $1 billion over several years. Hubei has also undertaken to supply a cash injection of $226,168,955.
The JV will focus on making 65- and 40-nm ICs with a manufacturing capacity of 45,000 wafers per month, SMIC said.
The establishment of the JV is also subject to obtaining necessary government approvals.
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