Semiconductor Manufacturing International Corp said Tuesday that China Investment Corp, the country's sovereign wealth fund, had agreed to invest US$300 million in the firm through convertible preferred shares and warrants purchase.
The investment is likely to help SMIC, China's biggest made-to-order chip maker, to expand production capacity and improve technology. It may also drive Shanghai-based SMIC to catch up with industry leaders like Taiwan Semiconductor Manufacturing Corp, industry insiders said.
After issuance and conversion of the new shares, CIC will own around 11.6 percent of SMIC's outstanding share capital. The deal also provides CIC with warrants for investing an extra US$50 million in SMIC on the same terms, the chip maker said in a statement yesterday.
"The CIC investment in SMIC provides a source of capital that allows us to take full advantage of projects in the pipeline," Jiang Shangzhou, chairman of SMIC, said in the statement.
SMIC, the world's No. 4 made-to-order chip maker, plans to invest US$12 billion over the next five years, Jiang said in an interview last month. The firm plans to generate revenue of US$5 billion in 2015, more than triple the level of its 2010 revenue.
