With major players Beijing Yandong Microelectronics and BOE leading the charge, China bets $4.6B on a cutting-edge 12-inch wafer fab to power its semiconductor future.
Beijing is set to invest 33 billion yuan (US$4.6 billion) in building a 12-inch wafer fabrication facility, led by state-owned enterprises and funds, as part of China’s push to enhance domestic semiconductor production. Beijing Electronics IC Manufacturing, a subsidiary of Beijing Electronics Holding will be overseeing the fab project
The project involves companies such as Beijing Yandong Microelectronics (YDME), listed on Shanghai’s Star Market, and BOE Technology, a display maker based in China.
YDME announced it would invest 4.99 billion yuan in the venture, giving it a controlling 24.95% stake supported by an acting-in-concert agreement. Separately, BOE revealed it would contribute 2 billion yuan for a 10% share in the project.
This new facility aims to address a domestic supply-demand gap in China’s integrated circuit (IC) market. The market is expected to reach a 21.2% production rate by 2026, up from 16.7% in 2021. By 2027, the fab aims to produce 370,000 wafers per month, focusing on mature nodes of 28 nanometres and larger.
Other investors include Beijing Yizhuang Investment, Beijing State-owned Capital Operation and Management, and ZGC Group, which will collectively provide 20 billion yuan, with additional funding sourced through debt financing.
According to the South China Morning Post, although Beijing is behind the Yangtze River Delta region in semiconductor manufacturing and backend processes like packaging and testing, this project is designed to close that gap and strengthen the city’s semiconductor industry.
The deal still requires approval from YDME shareholders and the State-owned Assets Supervision and Administration Commission.
This year, multiple projects took off in China as Huahong Semiconductor, China Resources Microelectronics, and Guangzhou ZenSemi advanced their 12-inch wafer fabs. SMIC reported full utilisation of its 12-inch capacity, with plans to add 30,000 wafers monthly in Q4.
Amid growing concerns from Chinese chip design firms, Taiwan Semiconductor Manufacturing Company (TSMC) has signalled it might halt advanced chip services for some AI clients, potentially impacting the supply of 7-nanometer nodes due to rising pressure from the US.
