Feb. 1, 2008 – Within discussions about its 4Q07 results and 2008 outlook, SMIC indicated it will set up a new independent unit in Shenzhen to run new 200mm-300mm lines, the latter utilizing 45nm process technology recently licensed from IBM, and both drawing on significant support from the municipal government.

“We desperately need another 8-inch facility to support the strong demand in China, especially in Southern part of China, around Shenzhen area,” SMIC founder/president/CEO Richard Ru Gin Chang said in the company’s conference call to go over financial results, Chang indicated that the Shenzhen municipal government will provide financing and incentive policies and build the site’s facilities, with SMIC using the operation “at a very, very favorable term.” SMIC already has a similar deal with its fab in Wuhan, likewise built by the government.

The 200mm portion of the Shenzhen site will use refurbished equipment for work using 0.35μm-0.13μm process technologies (including derivatives down to ~100μm), Chang said. Initial monthly capacity is pegged at 20,000 wafers, with the ability to meet demand expected to exceed 40,000 or even 50,000 wafers/month. Deliveries are slated to start in 2009.

SMIC also will add R&D centers in Chengdu and Wuhan, the company added.

SMIC is targeting 2008 capex to be flat at ~$700M, mainly to invest in advanced technology nodes and convert DRAM capacity to logic in its Beijing fab facility. New products will be qualified throughout the year at SMIC’s 300mm facility in Shanghai, with demand ramped according to demand, expected to be around 12,000-15,000 wafers/month by the end of 1Q09. In Beijing, DRAM conversion to logic has started, and will be down to “a small amount,” with capacity between 27,000-30,000 wafers/month. Across the company, total capacity by year’s end is expected to rise about 13% to 210,000 wafers/month (200mm equivalent); adding new capacity from Chengdu and Wuhan operations will bump that up to as much as 267,000 WPM.