China's top foundry, Semiconductor Manufacturing International Corporation (SMIC), is deepening its ties with state-backed capital. Following a major equity restructuring, government-led investment funds have significantly increased their combined ownership, positioning themselves as major shareholders in the chipmaking giant.
According to a regulatory filing by SMIC, the company issued 547.18 million new A-shares valued at 74.20 yuan per share to acquire the remaining 49% stake in its Beijing subsidiary, Semiconductor Manufacturing North China (SMNC). The total transaction is valued at 40.6 billion yuan (approximately $5.6 billion).
Upon completion of the deal, the combined stake held by Xinxin HK--an affiliate acting in concert with China's National Integrated Circuit Industry Investment Fund (often called the Big Fund)--rose from 2.92% to 6.80%. Under Chinese securities regulations, hitting the 5% ownership threshold triggers mandatory public disclosure of equity changes, casting a brighter spotlight on the growing presence of policy-driven state capital in SMIC's shareholder structure.
Through this transaction, SMIC successfully converted its core Beijing production base into a wholly-owned subsidiary. SMNC operates a critical 12-inch wafer foundry hub. Having previously held a 51% controlling stake, SMIC's acquisition of the remaining minority shares allows the foundry to fully internalize ownership of this high-profile facility.
Management expects the consolidation to immediately bolster net profit and earnings per share (EPS) without requiring any fundamental changes to its existing business operations.
“Securing absolute control over the Beijing 12-inch foundry hub will streamline manufacturing operations and accelerate strategic investment decisions,” an industry insider noted. “Furthermore, the expanding footprint of Chinese state capital inside SMIC indicates that future funding and government support will remain tightly aligned with Beijing's semiconductor self-sufficiency roadmap.”
The financial moves come amid strong operational performance. SMIC reported a first-quarter revenue increase of 11.5% year-over-year to $2.51 billion. Driven by tight supplies of mature-node chips and rising demand from global customers tapping into Chinese foundries, SMIC's wafer utilization rate climbed to 93.1%.
According to market research firm TrendForce, SMIC ranked third globally in the first-quarter foundry market with a revenue of $2.505 billion. Capturing a 5.1% market share, the Chinese chipmaker narrowed its gap with the world's second-largest foundry, Samsung Electronics (6.5%), to just 1.4 percentage points.
