China’s chip maker SMIC bags $2.2b investment from state investors

Photo by Alexandre Debiève on Unsplash

Shanghai-based chip maker Semiconductor Manufacturing International Corp has secured an investment worth $2.2 billion dollars from Chinese state investors, the company announced on Friday.

The funding was revealed on the same day that the United States announced new restrictions on Chinese tech company Huawei Technologies that would further impact its ability to source chips made with American technology.

According to SMIC‘s announcement, a number of vehicles under China’s so-called “Big Fund,” a government-backed money pool for funding domestic chip companies, will jointly make the investment in one of SMIC‘s plants.

The deal will bring its registered capital from $3.5 billion to $6.5 billion.

SMIC‘s ownership stake in the plant will decrease from 50.1% to 38.5% as a result of the transaction.

The plant has a manufacturing capacity of 6,000 14-nanometer wafers per month, and SMIC says it aims to increase that to 35,000 per month.

SMIC began mass production of 14-nanometer chips late last year. In an earnings call last week, executives said orders for such products constituted 1.3% of the company’s Q1 2020 revenues.

Taiwan Semiconductor Manufacturing Co, the company’s rival, has perfected 7-nanometer production and is on its way to developing 5-nanometer production capacity.

High-end chips from Apple Inc, Huawei and Qualcomm Inc all rely on 7-nanometer and 5-nanometer process nodes for production.

The U.S. Department of Commerce said on Friday it would place fresh restrictions on American companies who sell goods or services to Huawei.

In particular, the tightened restrictions threaten to upend Huawei’s relationship with TSMC by cutting off its access to American-made manufacturing tools.

SMIC, which also relies on these tools, could also stand to be affected. The company did not respond to Reuters’ request for comment on how the restrictions would affect its business or its ties to Huawei.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.