SMIC Shenzhen new factory, more details exposed

At the beginning of this year, SMIC issued a voluntary announcement. The announcement stated that the company signed a cooperation framework agreement agreed by the Shenzhen government on March 12, 2021 on the date of this announcement. Pursuant to the Cooperation Framework Agreement, the Company and the Shenzhen Government (through the Shenzhen Reinvestment Group), among others, intend to conduct project development and operation through SMIC Shenzhen by way of proposed capital contribution.

According to the announcement, according to the plan, SMIC Shenzhen will carry out the development and operation of the project, focusing on the production of 28nm and above integrated circuits and the provision of technical services, aiming to achieve a final monthly production capacity of about 40,000 12-inch wafers. Production is expected to start in 2022.

As can be seen from the announcement, after the final agreement is signed, the new investment in the project is estimated to be US$2.35 billion. The actual capital contribution of the parties will be determined based on the evaluation of SMIC Shenzhen by a third-party professional company. It is expected that upon completion of the Proposed Capital Contribution, SMIC Shenzhen will be owned as to approximately 55% and not more than 23% by the Company and Shenzhen CIC Group, respectively. SMIC said the company and the Shenzhen government will work together to push other third-party investors to complete the remaining contributions.

SMIC also emphasized in the announcement that the company and the Shenzhen government have agreed to negotiate in good faith to sign a final agreement on the proposed capital contribution and specific support matters.

A few days ago, the Pingshan District Investment Promotion Service Agency released the “Announcement on the Selection Plan of the 12-inch Wafer Foundry Production Line Supporting Plant Project”. In the announcement, they disclosed more details of SMIC’s new Shenzhen factory.

The public notice first pointed out the necessity of building this factory. They pointed out that integrated circuits are the basis and source of power for the rapid development of today’s information technology industry, and have been highly penetrated and integrated into every field of national economic and social development. Its technical level and development scale have become a measure of a country’s industrial competitiveness and comprehensive One of the important symbols of national strength. my country has always attached great importance to the development of the integrated circuit industry. The “National Integrated Circuit Industry Development Promotion Outline” proposes to “accelerate the development of the integrated circuit manufacturing industry, continue to promote the construction of advanced production lines” and “intensify the construction of 32/28nm chip production lines”. The national “14th Five-Year Plan” The outline proposes to “target the frontier fields such as integrated circuits and implement a number of forward-looking and strategic national major science and technology projects”, and the “Guangdong-Hong Kong-Macao Greater Bay Area Development Plan” proposes to “focus on key areas such as high-performance integrated circuits and their The key link is to implement a number of major projects in strategic emerging industries.”

At present, Shenzhen is in a leading position in China in terms of scale and technical level of the integrated circuit design industry, but the integrated circuit manufacturing industry chain is relatively weak. Compared with cities such as Beijing and Shanghai, Shenzhen currently has fewer integrated circuit manufacturing enterprises and smaller volumes. Focusing on the construction of 12-inch wafer foundry production lines and vigorously developing integrated circuit manufacturing, it is not only the demand to consolidate and enhance the competitiveness of Shenzhen’s integrated circuit industry, but also an important starting point for building a world-class new generation of information technology industry development highland.

At the same time, the publicity also talked about the feasibility of the plan. It is worth mentioning that in this part, the specific planning of SMIC’s new factory in Shenzhen is also discussed.

Due to the increasing demand in 5G, high-performance computing, artificial intelligence, Internet of Things, automotive electronics, 3C products, and household appliances, the domestic 12-inch foundry capacity is in short supply, and the capacity gap in 2019 is about 102,000 wafers / month, the capacity gap will further expand by 2024. According to the forecast of professional institutions, in 2024, the demand for 12-inch tape-out of China’s chip design companies will reach 815,000 pieces/month, of which, the demand for tape-out for 28nm and above line widths will be 696,000 pieces/month, and the 12-inch wafer foundry will require 696,000 pieces/month. Market demand is strong.

The products of this project are positioned in 12-inch 28nm and above line width Display driver chips and power management chips, etc. The industry type, construction content, and development prospects are highly consistent with the positioning and planning of Pingshan District, Shenzhen. The project will build a new bulk gas station and chemical warehouse and other facilities. After completion, it can provide nitrogen, oxygen and other bulk gases used in production, and chemicals such as acid and alkali, supporting a monthly production capacity of 40,000 12-inch wafers. Make up for the weak links in Shenzhen’s integrated circuit manufacturing industry chain and promote the rapid development of Shenzhen’s integrated circuit industry.

“The 12-inch wafer foundry production line is mainly planned for the mass production of 55nm high-voltage large-screen driver, 0.15μm power driver and 40/28nm high-voltage large-screen driver chip, with display driver, image sensing and power management products as the entry point. Compatibility of other types of products is reserved. The company has product technology and independent intellectual property rights, and the product yield is at the advanced level in the industry.” The announcement emphasized.

To this end, for this project, supporting facilities such as bulk gas stations and chemical warehouses required for the 12-inch wafer foundry production line will be built locally. The total construction area is about 69,410 square meters.