Semiconductor Manufacturing International Co. (SMIC), China’s largest foundry, said it plans to increase its capacity for 12 inch wafers despite U.S. sanctions.
The Trump Administration added SMIC to the U.S. Department of Commerce’s Entity List in October of 2020, effectively blacklisting companies from working with the Chinese foundry and hindering SMIC from developing sub-10 nm fab technologies by making it harder to acquire equipment.
Yet despite these issues, SMIC remained fifth overall in foundry production with $1.34 billion in the second quarter of the year, growing 21.8% due to client demand for semiconductors such as PMIC, MCUs, RF, HV and CIS.
Much of these gains were no doubt due to the ongoing chip shortage that is impacting the supply chain and due to overwhelming demand and more than 100% utilization production capacity.
"Since SMIC was placed on the ‘Entity List’ by the U.S., the company has faced tremendous challenges in production and operations," SMIC's management said in a statement. "Since the beginning of the year, we have focused on the two main priorities of ensuring operation continuity and continuous capacity expansion, realigning the supply chain and finding ways to optimize the procurement process, accelerate supplier qualification, and improve production planning and engineering management."
Advanced production nodes
The need for more advanced production capabilities is a way for SMIC to remain competitive against other foundries that are moving quickly to these process nodes such as Taiwan Semiconductor Manufacturing Corp. (TSMC), Samsung and Intel Corp.
SMIC has started production of two 300 mm fabs and plans to install additional tools into existing 300 mm fabs that will process wafers using 28 nm and thicker process technologies. Currently, the company can manufacture about 120,000 300 mm wafers per month, according to a report from Nikkei Asia.
When the fabs are complete, SMIC will be able to manufacture about 360,000 300 mm wafers per month.
The Chinese government wants SMIC to become a self-sufficient chip manufacturer and will play a crucial role in China's plans to build a semiconductor empire in the country.