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Semiconductor Manufacturing International Corp. (SMIC) announced a planned US$2.35 billion wafer-fabrication project in Shenzhen on March 17, 2021. The new facility was designed for 12-inch (300mm) wafers and 28nm-and-more-mature process technologies, with an eventual target of about 40,000 wafers per month. Production was expected to start in 2022—and SMIC later reported that the Shenzhen facility had entered production by the end of that year.
That result needs careful wording: entering production does not prove that the fab had reached its full planned capacity, achieved mass production, or was producing a particular mix of chips.
What SMIC announced in March 2021
SMIC announced the project through a March 17, 2021 regulatory disclosure. The project entity was SMIC Shenzhen, and the facility was planned for Pingshan District, where SMIC already operated an older 200mm facility.
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Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstallThe announcement described an estimated total investment of approximately US$2.35 billion. The new fab was intended to:
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- manufacture chips on 12-inch, or 300mm, wafers;
- support 28nm and more mature process technologies;
- begin production in 2022; and
- eventually reach approximately 40,000 12-inch wafers per month.
These were project plans and targets, not a statement that the full investment had already been spent or that the final production rate was immediately available. The filing referred to a definitive agreement, third-party assessment of funding contributions, and efforts to bring in additional investors. SMIC’s regulatory filing is the primary source for those terms.
What “28nm and above” means
“28nm and above” means 28nm and process generations with larger nominal geometries, such as 40nm, 55nm, 90nm, and older nodes. In semiconductor coverage, a larger node number generally indicates a more mature process rather than a leading-edge one.
That does not make the technology unimportant. Mature nodes are widely used for power-management chips, display drivers, microcontrollers, connectivity components, image sensors, automotive electronics, industrial devices, and many consumer products. A process node is not, by itself, a measure of whether a chip is good or bad: cost, power consumption, performance, reliability, design tools, yield, and available production volume all matter.
The Shenzhen project therefore should not be described as a fab primarily intended for 7nm, 5nm, or 3nm processors. Its disclosed purpose was to add high-volume mature-node capacity. Contemporaneous coverage discussed applications including automobiles, appliances, transportation, and aerospace, but that does not establish that the Shenzhen facility had specific customers in each sector. China Daily’s government portal provides that broader industrial context.
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How large was the planned capacity?
The announced eventual target was approximately 40,000 12-inch wafers per month. Using SMIC’s stated conversion factor of 2.25, that is roughly equivalent to 90,000 standard 8-inch wafers per month:
40,000 × 2.25 = approximately 90,000 8-inch-equivalent wafers per month.
This is only a comparison measure. It does not mean the fab would produce 90,000 physical 300mm wafers. Nor does the target establish the facility’s initial output, utilization, yield, or eventual commercial ramp.
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A new Shenzhen fab—but not SMIC’s first Shenzhen operation
The project was an expansion of SMIC’s Shenzhen presence, not the company’s first fab in the city. SMIC already operated an 8-inch (200mm) facility there, producing chips across older process generations.
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The distinction matters because 200mm and 300mm fabs are different production platforms. Larger wafers allow more individual dies to be produced from each wafer, although the economic benefit depends on equipment, process complexity, die size, yields, and demand. The 2021 project was intended to add a new 300mm line focused on 28nm and more mature technologies alongside the existing Shenzhen operations.
Who was financing the project?
Initial disclosures indicated that SMIC would hold approximately 55% of the project. Shenzhen Major Industry Investment Group, a Shenzhen government-backed investment vehicle, was expected to hold up to 23%, with other investors supplying the remaining capital.
The ownership structure later changed. SMIC’s 2021 reporting described a structure in which China IC Fund II took a 22% interest. The reported ownership of the Shenzhen entity was approximately:
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- SMIC Investment: 5.26%;
- Shenzhen Major: 23%; and
- China IC Fund II: 22%.
SMIC’s combined indirect interest remained approximately 55%. This later structure should not be confused with the exact shareholding disclosed in the original March announcement. It also reinforces why US$2.35 billion should be called an estimated project investment, rather than described as a single immediate cash payment by SMIC.
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- For the state-of-the-art Socket AM5 platform, can support PCIe 5.0 on select motherboards
- Cooler not included
Why Shenzhen and SMIC wanted the project
The announcement came during the global chip shortage of 2020–2021, when demand for many mature-node components was strong. At the same time, China was pursuing greater domestic semiconductor manufacturing capacity, while SMIC faced U.S. export-control and sanctions-related constraints affecting access to parts of the global semiconductor supply chain.
Those factors increased the strategic value of additional domestic manufacturing, but they should not be treated as proof that U.S. restrictions alone caused the project. The business case also included demand for mature-node chips, SMIC’s need to expand capacity, and Shenzhen’s established electronics and technology ecosystem.
A local fab could potentially improve supply availability for selected chip designers and shorten parts of the manufacturing chain. It could also give customers more room to qualify products on additional process platforms. But one fab cannot make China self-sufficient across every semiconductor category, especially advanced logic, specialized equipment, materials, and software.
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Yes, based on SMIC’s later reporting. In its fourth-quarter 2022 results announcement, SMIC said that SMIC Shenzhen had entered production by the end of 2022. That confirms the broad timing in the 2021 announcement. SMIC’s 2022 results announcement also distinguished the status of other projects: SMIC Jingcheng was in pilot production, SMIC Lingang had completed the main fab shell, and SMIC Xiqing had begun construction.
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“Entered production” is not synonymous with “reached full capacity.” A fab can begin production while it is still installing equipment, qualifying processes, improving yields, increasing customer output, and ramping monthly wafer starts.
The evidence confirms production activity at SMIC Shenzhen by the end of 2022. It does not establish that the facility had already reached the planned 40,000 12-inch wafers per month, achieved sustained mass production at that rate, or operated at a particular utilization level.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How the project fits into SMIC’s wider expansion
The Shenzhen project was one part of a broader expansion involving mature-node and more advanced manufacturing capacity in several Chinese locations, including Beijing and Shanghai. SMIC later announced additional projects, including a major investment in Tianjin. The Tianjin announcement illustrates the scale of the company’s wider capacity-building effort, but it should not be used as a measure of the Shenzhen fab’s own output.
Capacity growth across a foundry is not the same as capability growth at every site. Semiconductor output depends on lithography and other equipment, materials, process qualification, customer designs, yields, workforce, logistics, and market demand. Adding mature-node wafers can ease shortages in some product categories without resolving bottlenecks in advanced processors or specialized technologies.
What is known about the fab’s later status?
SMIC’s 2025 annual report said the company as a whole had surpassed 1 million standard 8-inch-equivalent wafers of monthly capacity. It also reported company-wide 2025 revenue of US$9.327 billion and utilization of 93.5%.
Those figures apply to SMIC overall, not specifically to the Shenzhen facility. The available material does not establish Shenzhen’s 2025 or 2026 capacity, utilization, product mix, customer list, profitability, or whether the original 40,000-wafer monthly target had been reached. A plant-specific claim on any of those points would require a separate company disclosure.
Quick Recap
What the announcement did—and did not—prove
| Question | Supported answer |
|---|---|
| Was it a real project? | Yes. SMIC announced a specific project entity, location, investment plan, technology range, ownership structure, and capacity target. |
| Was US$2.35 billion already spent? | No. It was an estimated total project investment subject to funding arrangements and further agreements. |
| Was it a leading-edge fab? | No. The disclosed focus was 28nm and more mature technologies. |
| Was it SMIC’s first Shenzhen fab? | No. SMIC already had a 200mm Shenzhen operation. |
| Did it enter production in 2022? | Yes. SMIC later reported that SMIC Shenzhen had entered production by the end of 2022. |
| Did it reach 40,000 wafers per month? | Not established by the available evidence. That figure was the eventual planned target. |
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