Semiconductor Manufacturing International Corporation

Semiconductor Manufacturing International Corporation (SMIC) is a publicly held semiconductor foundry company,[1][2] and the largest in China.[3][4]

Semiconductor Manufacturing International Corporation
Native name
中芯国际集成电路制造有限公司 (中芯国际)
Public
Traded asSSE: 688981 (A share)
SEHK: 981 (H share)
IndustrySemiconductor
Founded2000 (2000)
Cayman Islands
FounderRichard Chang Ru-gin
HeadquartersShanghai, China
Key people
Haijun Zhao (CEO)
RevenueUS$3.36 billion (2018)
US$91.7 million (2018)
US$77.2 million (2018)
Number of employees
18,015 (2018)
Websitesmics.com

SMIC has wafer fabrication sites throughout mainland China, offices in the United States, Italy, Japan, and Taiwan, and a representative office in Hong Kong.[5] It is headquartered in Shanghai, China[6] and incorporated in the Cayman Islands.[7] It provides integrated circuit (IC) manufacturing services on 350 nm to 14 nm process technologies.

Notable customers include Qualcomm,[3][8] Broadcom,[9] and Texas Instruments.[10][3]

History

It was founded on April 3, 2000 and is headquartered in Shanghai.[6] It was incorporated in the Cayman Islands as a limited liability company.[7] Harvard Business School did a case study on the school in the October 2012 edition by Willy Shih.[11] In 2013, SMIC established a joint venture in Beijing to fabricate using 40 nm and below technologies.

On December 22, 2014, SilTech Shanghai, one of SMIC's indirectly wholly owned subsidiaries; JCET; and China IC Fund entered into a co-investment agreement to form an investment consortium in connection with the proposed acquisition of STATS ChipPAC, a provider of advanced semiconductor packaging and test services and a company incorporated in the Republic of Singapore, shares of which were listed on the Singapore Exchange Securities Trading Limited before the acquisition. On June 18, 2015, according to the co-investment agreement, SilTech Shanghai invested US $102 million as a capital contribution for 19.6% ownership interest in Changjiang Xinke, a company incorporated in Jiangsu province, China, which is accounted as an associate of the Group.

On June 23, 2015, Huawei, Qualcomm Global Trading Pte. Ltd., IMEC International, and SMIC announced the formation[12] of the SMIC Advanced Technology Research & Development (Shanghai) Corporation, an equity joint venture company. The joint venture company's focus was to be the R&D for the next generation CMOS logic technology and was designed to build China’s most advanced integrated circuit (IC) development R&D platform. SMIC Advanced Technology R&D (Shanghai) Corporation is majority owned by SMIC, while Huawei, IMEC, and Qualcomm are minority shareholders. The focus of the joint venture company is on developing 14 nm logic technology.

On June 24, 2016, SMIC. LFoundry Europe and Marsica entered into a sale and purchase agreement pursuant to which LFoundry Europe and Marsica agreed to sell and SMIC agreed to purchase 70% of the corporate capital of LFoundry S.r.l. for an aggregate cash consideration of EUR49 million subject to adjustment. The acquisition was completed as of July 29, 2016.

On October 14, 2016, Ningbo Semiconductor International Corporation was jointly established by China IC Capital (the wholly owned investment fund of SMIC), Ningbo Senson Electronics Technology Co., Ltd, and Beijing Integrated Circuit Design and Testing Fund with a registered capital of RMB355 million, equal to US$52.8 million. SMIC holds 66.76% of the ownership interest. NSI will develop analog and specialty semiconductor process technology platforms in the areas of high-voltage analog, radio frequency, and optoelectronics. These developments will support customers in IC design and product development for applications in smart home, industrial, and automotive electronics, new generations of radio communications, augmented reality, virtual reality, mixed reality, and other specialty systems.[13]

In 2018, SMIC had gross profits of $747 million and net profits of $149, with $3.6 billion in revenues.[3] It apparently spend around $550 million on research and development, or about 16 percent of sales.[14] On May 18, 2018, ground was broken on the manufacturing base for SMIC in Shaoxing. SMIC was building a plant that would be the first in China to use 14-nanometer production technology.[15] The company said it would increase its investment capacity by 20% in February of 2019.[16]

Current co-CEOs are Zhao Haijun and Mong Song Liang. Zixue Zhou serves as chairman of the board.[17] In May 2019, it was said that SMIC's co-chiefs, Zhao Haijun and Liang Mong-song were at odds over how to focus the company.[1]

On May 24, 2019, SMIC announced it would voluntarily delist from the Nasdaq, citing low trade volumes.[18][19][20] Along with low US trading volumes, the company named the high administrative cost of maintaining the NYSE listing.[20]; it joined the exchange 14 years before.[21] On May 25, 2019, it announced it would also delist from the New York Stock Exchange (NYSE) following Huawei blacklisting by the United States government amid the China–United States Trade War.[18]

As of June 2019, SMIC instead became available for over-the-counter trading by American investors via the OTC Markets Group OTCQX Best Market under the stock symbol "SMICY".[22]

In 2019, Qualcomm, Huawei, and imec were still minority shareholders in SMIC's R&D arm.[3]

In July 2020 SMIC issued ~1.685 million shares at 27.46 yuan per share on the Shanghai Stock Exchange, raising 46.28 billion yuan ($6.62 billion).[23]

Processes

14 nm

On 14 November 2019, SMIC announced that volume production of 14 nm FinFET had begun.[24]

N+1

N+1 is the follow-on to SMIC's 14 nm process, and is targeted for inexpensive chips. The modest improvements put N+1 capabilities between 14 nm and 7 nm.[25] According to analysts, N+1 is equivalent to Samsung's 8 nm, which is slightly better than TSMC's 10 nm.[26] Risk production is planned to begin in the fourth quarter of 2020.[25]

SMIC acquired an EUV step-and-scan system from ASML Holding for $120 million in 2018[27] but it was not used for either 14 nm[24] or N+1.[25]

Litigation with TSMC

The company was the target of a lawsuit brought by TSMC, accusing SMIC of misappropriating TSMC intellectual property.[28] The first round of litigation ended in 2005 with a $175 million settlement. A second round was opened in 2006. The liability phase of the lawsuit began on September 9, 2009 in Oakland, California,[29] and the jury found SMIC liable on 61 out of 65 claims.[30]

SMIC entered into a settlement agreement with TSMC to resolve all pending lawsuits between the parties, including the legal action filed by TSMC in California for which a verdict was returned by the jury against SMIC on November 4, 2009 and the legal action filed by SMIC in Beijing. SMIC and TSMC have entered into a settlement agreement on November 9, 2009 to settle and dismiss the California case, including all claims and defenses of SMIC yet to be decided in that case and SMIC's appeal in the Beijing case, thus concluding all pending court litigation between the parties.

Key provisions of the settlement include a mutual release of all claims that were or could have been brought in the pending lawsuits; termination of SMIC's obligation to make remaining payments under the prior settlement agreement between the parties (approximately US$40 million); payment to TSMC of an aggregate of US$200 million; and a grant to TSMC of approximately 8% of SMIC's issued share capital and a warrant which would allow TSMC to obtain total ownership of approximately 10% of SMIC's issued share capital.[31]

Locations

SMIC has customer service and marketing offices in the U.S., Europe, Japan and Taiwan, and a representative office in Hong Kong.[5] It has manufacturing facilities at the following locations:

See also

References
  1. "Co-chiefs of China's top chipmaker SMIC fighting over strategy". Financial Times. (published 05-09-2019)
  2. "Either Huawei Doesn't Need U.S. Tech Or It Does. Which Is It?". Forbes. (published 05-24-2019)
  3. "China's biggest chipmaker has applied for 'voluntary delisting' from the New York Stock Exchange amid the trade war and Trump's crackdown on Chinese tech (SMI)". Connecticut Post. (published 05-25-2019)
  4. "Breakingviews - Money can't buy China's chip industry much love". Reuters. (published 02-18-2019)
  5. "SMIC - Contact Us". SMIC website. Archived from the original on 4 January 2012. Retrieved 6 January 2012.
  6. "SMIC". Nikkei Asian Review.
  7. "SMIC". Nasdaq.
  8. "SMIC Receives Supplier Award from Qualcomm". SMIC press release. 14 December 2011. Archived from the original on 9 February 2012. Retrieved 6 January 2012.
  9. "Broadcom 2010 Annual Report". p. 20. Retrieved 6 January 2012.
  10. "SMIC Earns Texas Instruments' Supplier Excellence Award for 2010". SMIC press release. 14 April 2011. Archived from the original on 29 October 2011. Retrieved 6 January 2012.
  11. "Semiconductor Manufacturing International Corporation: 'Reverse BOT'". Harvard Business School. (published 01-2009)
  12. "Qualcomm in Venture With Chinese Chip Maker". The New York Times. (published 06-23-2015)
  13. "SMIC 2017 Attachment" (PDF). SMIC. Archived from the original (PDF) on 2017-06-13. Retrieved 2017-05-15. (published 2018)
  14. "China's ability to make computer chips still 'years behind' industry leaders". Financial Times. (published 01-21-2019)
  15. "Zhejiang province committed to Yangtze River Delta integration". Zhejian China. (published 05-23-2019)
  16. "China's top chipmaker SMIC to boost capex 20% despite downturn". Nikkei Asian Review. (published 02-15-2019)
  17. "Company Overview of Semiconductor Manufacturing International Corporation". Bloomberg.
  18. "Chinese chip giant SMIC to delist from NYSE following Huawei ban". Cnet. 24 May 2019.
  19. "China's largest chipmaker is delisting from the Nasdaq – TechCrunch". techcrunch.com.
  20. "China's biggest chip maker to delist from NYSE as US targets tech". South China Morning Post.
  21. "Trump's Huawei Ban: A Bane for Apple?". Fortune. 25 May 2019.
  22. "OTC Markets Group Welcomes Semiconductor Manufacturing International Corporation to OTCQX". PR Newswire. (published 06-14-2019)
  23. Kharpal, Arjun (15 Jul 2020), "Shares of China's biggest chipmaker SMIC surge nearly 202% in Shanghai debut", www.cnbc.com
  24. Shilov, Anton. "SMIC Begins Volume Production of 14 nm FinFET Chips: China's First FinFET Line". www.anandtech.com. Retrieved 2019-11-16.
  25. Shilov, Anton (23 March 2020). "SMIC Details Its N+1 Process Technology: 7nm Performance in China". AnandTech. Retrieved 10 June 2020.
  26. https://semiengineering.com/china-speeds-up-advanced-chip-development/
  27. "SMIC to move FinFET process to volume production by year-end 2019". DIGITIMES. Retrieved 2019-08-18.
  28. "TSMC v. SMIC, 161 Cal.App. 4th 581, 74 Cal.Rptr.3d 328 (March 27, 2008)" (PDF). Retrieved 2009-10-09.
  29. Lammers, David (2009-09-10). "TSMC vs. SMIC Trial Commences in Oakland". semiconductor.net. Semiconductor International. Archived from the original on 2009-09-16. Retrieved 2009-10-09.
  30. Longstreth, Andrew (2009-11-05). "Jeffrey Chanin of Keker & Van Nest". AmLaw Litigation Daily. Press Release. Retrieved 2009-11-05.
  31. "SMIC Settles All Pending Lawsuits with TSMC: Anticipates No Disruption to Customers". SMIC press release. 2009-11-10. Retrieved 2012-01-06.

Further reading
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