Semiconductor Manufacturing International Corporation
|Traded as||NYSE: SMI|
|Founder||Richard Chang Ru-gin|
|Haijun Zhao (CEO)|
|Revenue||US$3.36 billion (2018)|
|US$91.7 million (2018)|
|US$77.2 million (2018)|
Number of employees
SMIC has wafer fabrication sites throughout mainland China, offices in the United States, Italy, Japan, and Taiwan, and a representative office in Hong Kong. It is headquartered in Shanghai, China and incorporated in the Cayman Islands. It provides integrated circuit (IC) manufacturing services on 350 nm to 14 nm process technologies.
It was founded on April 3, 2000 and is headquartered in Shanghai. It was incorporated in the Cayman Islands as a limited liability company. Harvard Business School did a case study on the school in the October 2012 edition by Willy Shih. 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 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.
SMIC is expected to start mass production of 14 nm FinFET in the first half of 2019. Analysts report that SMIC 14 nm capacity will be relatively small when compared to the industry leaders, all of whom run multiple leading-edge fabs. SMIC currently has two fabs that can process 300 mm wafers using 28 nm and larger fabrication processes. The same fabs will be used for 14 nm projects too, but given their capacities and SMIC’s very high fab utilization rate (94.1% in Q2 2018), do not expect them to make loads of 14 nm SoCs. And for these reasons, along with prepping 14nm for its current fabs, the company is building a $10 billion fab that will be used for 14 nm, and is aimed at better serving local players.
In 2018, SMIC had profits of $747 million, with $3.6 billion in revenues. It apparently spend around $550 million on research and development, or about 16 percent of sales. On May 18, 2018, ground was broken on the manufacturing base for SMIC in Shaoxing. SMIC waas building a plant that would be the first in China to use 14-nanometer production technology. The company said it would increase its investment capacity by 20% in February of 2019.
Current co-CEOs are Zhao Haijun and Mong Song Liang. Zixue Zhou serves as chairman of the board. 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.
On May 24, 2019, SMIC announced it would voluntarily delist from the NYSE, citing low trade volumes. Along with low US trading volumes, the company named the high administrative cost of maintaining the NYSE listing. It had joined the exchange 14 years before. It will delist around June 13.
On August 16, 2019, SMIC announced it will begin 14nm FinFET volume production by the end of 2019. And SMIC received an EUV step-and-scan system from ASML that was acquired for $120 million in 2018. On November 14, 2019, SMIC announced its 14 nm FinFET had begun volume production.
In 2019, Qualcomm, Huawei, and imec were still minority shareholders in SMIC's R&D arm.
Litigation with TSMC
The company was the target of a lawsuit brought by TSMC, accusing SMIC of misappropriating TSMC intellectual property. 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, and the jury found SMIC liable on 61 out of 65 claims.
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.
SMIC has customer service and marketing offices in the U.S., Europe, Japan and Taiwan, and a representative office in Hong Kong. It has manufacturing facilities at the following locations:
- Shanghai: 300mm wafer fab and 200mm wafer fab
- Beijing: Two 300mm wafer fab and 200mm wafer fab
- Tianjin: 200mm wafer fab
- Shenzhen: 200mm and 300mm wafer fab
- Avezzano, Italy: 200mm wafer fab
- Jiangyin: 300mm bumping facility
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- "TSMC v. SMIC, 161 Cal.App. 4th 581, 74 Cal.Rptr.3d 328 (March 27, 2008)" (PDF). Retrieved 2009-10-09.[dead link]
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- Longstreth, Andrew (2009-11-05). "Jeffrey Chanin of Keker & Van Nest". AmLaw Litigation Daily. Press Release. Retrieved 2009-11-05.
- "SMIC Settles All Pending Lawsuits with TSMC: Anticipates No Disruption to Customers". SMIC press release. 2009-11-10. Retrieved 2012-01-06.[permanent dead link]