Semiconductor Manufacturing International Corporation, generally known by the acronym SMIC, is a semiconductor foundry with its operational headquarters in Shanghai. Its business consists of turning integrated circuit designs created by its customers into physical chips, produced on silicon wafers. It holds an important position in China’s ecosystem, where mastery of electronics manufacturing is an industrial and strategic priority.
A foundry born in Shanghai
Founded in 2000, SMIC grew as China strengthened its electronics industry and sought to produce more components domestically. The company gradually built a network of manufacturing sites, notably in Shanghai, Beijing, Tianjin and Shenzhen. It operates as an independent foundry: it offers its processes and production capacity to companies that design chips without necessarily owning factories.
Listed on the Hong Kong Stock Exchange in 2004, then on Shanghai’s STAR Market in 2020, SMIC raises capital for a particularly capital-intensive business. Building a factory is not enough: processes must also be qualified, yields improved and consistent production ensured to meet customer specifications.
Processes for a wide range of components
SMIC’s offering spans several generations of manufacturing technologies. Its processes are used in particular to produce logic circuits, analog components, power management circuits and communications chips. These technologies are used in smartphones, connected devices, industrial equipment and other electronic systems. So-called mature nodes, which are less miniaturized than leading-edge processes, remain essential for many applications.
Beyond manufacturing, SMIC provides technical support to help adapt designs to the constraints of its processes. Customer relationships depend as much on capacity availability as on reliability, costs and achieved performance. The company has also demonstrated advances in miniaturization: in 2023, independent analyses of the processor in a Huawei smartphone identified a chip manufactured by SMIC using a 7-nanometer-class process. This observation alone, however, does not establish production volumes or their profitability.
What next?
SMIC’s trajectory depends on its ability to increase production while securing its supplies. Since being added to the US Entity List in 2020, the company has operated in an environment of restrictions that complicate access to certain foreign technologies. Controls on advanced equipment weigh particularly heavily on progress toward smaller process nodes.
Chinese demand and the drive to localize sourcing provide avenues for growth, without removing technical or economic constraints. For SMIC, the challenge will be to turn its investments into competitive capacity, strengthen its proven processes and continue miniaturization. Its development will remain an indicator of China’s industrial autonomy in semiconductors.