Semiconductor Manufacturing International Corp. (00981.HK) received approval from China's top securities regulator to acquire the remaining 49 percent stake in a key production joint venture, a move that consolidates its control over a major manufacturing base in Beijing.
The company announced in a filing that the China Securities Regulatory Commission (CSRC) granted registration approval for the proposed share issuance on May 21. The transaction allows SMIC to absorb the minority stake in Semiconductor Manufacturing North China (Beijing) Corp., which it previously did not own, cementing its hold over the entity.
To fund the acquisition, SMIC will issue shares to a consortium of state-backed investors. The group includes the China Integrated Circuit Industry Investment Fund (ICF), often referred to as the "Big Fund," alongside Beijing Integrated Circuit Manufacturing and Equipment Equity Investment Center, Beijing E-Town International Investment & Development, Zhongguancun Development Group, and Beijing Industrial Development Investment Management.
This regulatory green light is a critical step in SMIC's strategy to streamline its operations and expand capacity, aligning with Beijing's national goal of building a more self-reliant semiconductor supply chain. By securing full control of the northern facility, China's largest chipmaker strengthens its ability to compete with global foundries like Taiwan's TSMC and South Korea's Samsung Electronics.
The involvement of the ICF, China's primary state-led vehicle for investing in the semiconductor sector, signals strong government backing for the consolidation. The acquisition is seen as a strategic move to better coordinate production and research and development efforts as China pushes to reduce its reliance on foreign technology. For SMIC, the deal simplifies its corporate structure and paves the way for more efficient capital allocation and operational management of one of its important manufacturing hubs.
This article is for informational purposes only and does not constitute investment advice.
