SMIC to set up $12 Billion plant In Shanghai, China for sub-14nm chip nodes

The Municipal and Development Reform Commission of the Chinese Eastern Port city Shanghai has announced the list of major construction projects for 2021. This list focuses on-chip fabrication firms, adding a host of other names in addition to the Semiconductor Manufacturing International (SMIC), which is widely thought of as China’s only alternative to the Taiwan Semiconductor Manufacturing Company (TSMC) in the wake of stringent American sanctions.

SMIC, Others To Receive Government Support In Setting Up Chip Fabrication Lines In Shanghai, China

The list covers several industries which the Shanghai authorities have deemed necessary for social development and keeping up with global industries. It consists of 166 projects in total, out of which seven chip firms including SMIC have also made the cut.

China’s Parting Shot at Trump is Sanctions on Former Officials

Through the project list, SMIC will be able to set up its SN1 12-inch (300mm) wafer production line and it will be joined by Huali Microelectronics, who also plans to establish a 12-inch line. 12-inch silicon wafers are generally used to integrated circuit chips that are used in a host of consumer electronics. Huali’s Huahong No. 5 plant in Mainland China was also the country’s first fully-automated chip production line. It covers the 55nm, 40nm and 28nm process nodes and is capable of producing 35,000 wafers-per-month. The company is also building a second plant in the Kangqiaozhen subdistrict of Pudong, Shangai to manufacture 40,000 12-inch wafers-per-month, start from the 28nm process and go as low as 14nm.

SMIC’s SN1 plant is also located in Pudong, and it will focus on developing advanced process technology nodes below 14nm. Through the plant, the chipmaker hopes to produce 35,000 units-per-month, and the facility requires a $12 billion investment. The chipmaker is moving ahead with its plans to manufacture 7nm chips, but its plans of moving further down are hampered by an inability to secure Extreme Ultraviolet (EUV) machines that use smaller light wavelengths and enable fabs to easily reduce transistor sizes over standard diffusion lithographic equipment.

Dutch company ASML’s EUV machines are at the heart of modern-day chip fabrication. Image: ASML

Other chip firms part of the list include Jita Semiconductor, Jingce Semiconductor’s R&D headquarters and manufacturing base, Geke Semiconductor, Dingtai Semiconductor, Xinsheng Semiconductor, Shanghai Tianyue and Shanghai Lingang. The projects include Jingce’s R&D headquarters and manufacturing base, Geke’s 12-inch imaging solution R&D project, Dingtai’s 12-inch automated wafer manufacturing facility, Xinsheng’s 12-inch IC silicon wafer R&D and manufacturing project, Tianyue’s silicon carbide development and Lingang’s 4-inch and 6-inch mass production lines.

Of all the companies mentioned, Xinsheng is the most ambitious. The firm, headquartered in the Baoan district of Shenzen city, aims to beef up its production to produce up to one million pieces-per-month. Currently, it is capable of manufacturing 150,000 pieces/month, and it was the first Chinese company to successfully sell 12-inch wafers on a large scale. Its capacity expansion to 300,000 pieces/month is in the second stage of development and the chipmaker hopes that the phase will be complete by the end of this year.

In addition to chip fabrication, a burgeoning upstream and downstream industry is also taking shape in China. In this supply chain, equipment manufacturing companies are perhaps the most important, as they highlight efforts towards achieving freedom from international sanctions. China Microelectronics, Xiamen Sheng Mei Shi Automation Equipment and KST are part of the equipment manufacturing chain, but their progress in achieving global parity is unclear.