SMIC subsidiary continues to fulfill Chinese demands for FinFET capabilities

Amanda Liang, Taipei; Misha Lu, DIGITIMES Asia 0

Following a DIGITIMES Asia report in mid-May indicating that Chinese foundry SMIC has removed its 14nm FinFET offering from its website, recent Chinese media reports suggested that SMIC's Shanghai-based subsidiary, Semiconductor Manufacturing South Corp., continues to offer manufacturing service at 14nm and below.

According to Chinese media, leading Chinese semiconductor equipment supplier NAURA Technology Group has seen orders surpassing expectations for the first five months of 2023, with Semiconductor Manufacturing South Corp. reportedly being the largest buyer.

Neither SMIC nor NAURA has officially commented on the issue. On its investor relations platform, NAURA merely indicated that they currently have sufficient orders and expect continued growth in the second quarter of 2023.

Founded in December 2016 as a SMIC subsidiary, Semiconductor Manufacturing South Corp in fact serves as a major platform for the R&D and volume production of SMIC's 14nm and sub-10nm manufacturing processes. It has two production lines, SN1 and SN2.

According to Chinese media Ijiwei, the SMIC subsidiary counts China's National IC Fund and Shanghai IC Industry Investment Fund among its investors. Chinese media STAR Market Daily indicated that the second phase of National IC Fund injected about CNY10 billion into the company in 2020. In combination, the first and second phase of National IC Fund holds a 37.64% share of Semiconductor Manufacturing South Corp. The Shanghai IC Industry Fund holds a combined share of 23.85%.

Citing sources from Chinese security firms, STAR Market Daily also reported that the yield rate of 10nm process at Semiconductor Manufacturing South Corp. is still low, thus capacity expansion hardly makes economical sense. However, there are clear long-term demands for the fab's 14nm-based specialty technology offerings from some China-based customers, making early capacity expansion a reasonable approach.