China’s leading pure-play foundry Semiconductor Manufacturing International Corp. (SMIC) is acquiring the remaining 49% stake in Semiconductor Manufacturing North China (SMNC) in a $5.79 billion deal that will expand SMIC’s mature node capabilities.
SMNC focuses on 12-inch wafers for integrated circuits across different process nodes. The deal will help to improve SMIC’s asset quality and support its long-term development, SMIC said.
In a separate announcement, SMIC said it has registered capital for another subsidiary, dubbed SMSC, that it will increase to $10.1 billion from $6.5 billion with new and existing investors.
Mature nodes
In 2020, Chinese foundry SMIC was slapped with export restrictions by the U.S. Department of Commerce (DoC) to curb the semiconductor manufacturer from gaining ground on competitors.
Five years later, SMIC continues to expand its production capacity with new land buys for future expansion and continued investment into its subsidiaries and other state-backed firms in capital and back-end equipment.
Much of this expansion is in mature process capacities, according to market research firm TrendForce, with Chinese foundries' mature process capacity likely to surpass 25% by the end of 2025 with 28 nm/22 nm processes seeing the largest additions. Specialty process nodes in high-voltage platforms will also grow this year after entering mass production in 2024.
Faced with the inability to get the capital equipment needed to produce advanced nodes due to export restrictions, Chinese foundries started turning to mature process technologies including SMIC, HuaHong Group and Nexchip.
While not as flashy or headline-making as advanced process nodes, mature lines are still needed for semiconductors like driver ICs, image sensors, power discretes and more. This will likely increase the dependency on Chinese foundries even more in these sectors, TrendForce said.
Continued research and investment
However, Chinese researchers and SMIC are continuing to invest in R&D to build home-grown advanced semiconductor equipment due to the export restrictions. Late in 2025, Peking University in China said it had developed an industrial process that could lead to lithography advancements domestically.
Lithography technology is one of the main driving forces to scaling semiconductor manufacturing to allow for greater integration and more transistors on chips.
SMIC has been able to push its old equipment to the limit, but yields are getting worse as SMIC pushes to quadruple patterning. China is seeking to enable smaller advanced nodes without having the proper equipment from Dutch toolmaker ASML and others.
In early July 2025, the U.S. government struck a deal with China that eliminated restrictions on U.S.-based electronic design automation (EDA) firms — like Synopsys, Siemens EDA and Cadence — sending technology to the country.
In exchange, China curbed some export controls on rare Earth materials like antimony, gallium and germanium.
Other deals could come as the U.S. seeks to retain materials for its own semiconductor supply chain.
