Hua Hong Semiconductor gets state backing for US$6.7 billion wafer fab as China continues its pivot to mature chip nodes
- Based in Wuxi, the new fab will be Hua Hong’s second 12-inch facility in the city, and will produce chips using mature tech nodes such as 65-nanometre, 55-nm and 40-nm
- The China Integrated Circuit Industry Investment Fund Co, known as the Big Fund, and an unnamed ‘Wuxi entity’ will invest US$1.165 billion and US$804 billion, respectively
China’s second-largest chip foundry Hua Hong Semiconductor Group, a state-backed semiconductor investment fund and a Wuxi entity signed a deal on Wednesday for a US$6.7 billion wafer fabrication plant in eastern Wuxi, the biggest such investment since Washington imposed stricter sanctions on China’s chip industry in October.
Based in the eastern chip-making stronghold of Wuxi, Jiangsu province, the wafer fab will be Hua Hong’s second 12-inch facility in the city, and will produce chips using mature tech nodes such as 65-nanometre, 55-nm and 40-nm, according to a stock filing by Hua Hong Semiconductor Limited on Wednesday.
Hong Kong-listed Hua Hong Semiconductor and its fully-owned subsidiary Hua Hong Grace Semiconductor Corp will invest US$880.38 million and US$1.169 billion in cash, respectively, giving them a combined 51 per cent stake in the new foundry.
The China Integrated Circuit Industry Investment Fund Co – known as the Big Fund – and an unnamed “Wuxi entity”, will invest US$1.165 billion and US$804 billion in cash, respectively, according to the filing.
The total investment in the new fab will be US$6.7 billion, of which US$4.02 billion will be new capital injection by Hua Hong Semiconductor and its subsidiary, the Big Fund and the Wuxi entity, while US$2.68 billion will come from debt financing.