Semiconductor Manufacturing International Corporation (SMIC) received regulatory approval for its $5.9 billion transaction to acquire all remaining shares of SMIC North. This deal, the largest M&A within China's domestic wafer foundry industry, will make SMIC North a wholly owned subsidiary, expanding SMIC’s control over advanced 12-inch wafer fabrication capabilities.
- SMIC to fully own SMIC North after $5.9 billion acquisition
- Shanghai Stock Exchange approves the largest wafer foundry M&A in China
- Deal includes stake from China Integrated Circuit Industry Investment Fund
What happened
The M&A Review Committee of the Shanghai Stock Exchange formally approved Semiconductor Manufacturing International Corporation’s plan to issue shares and acquire assets from SMIC North’s minority shareholders. This plan, originally filed in late 2025, involves acquiring a 49% equity stake held by five shareholders, including significant investment by China’s Integrated Circuit Industry Investment Fund, also known as the Big Fund.
The acquisition deal is valued at RMB 40.601 billion (approximately $5.9 billion), making it the largest merger and acquisition recorded so far in China’s wafer foundry sector. Following the transaction, SMIC will hold full ownership of SMIC North, a critical subsidiary specializing in 12-inch wafer fabrication across various semiconductor process technologies.
Why it matters
This acquisition represents a major consolidation move within China’s semiconductor manufacturing industry, aiming to strengthen domestic capabilities and reduce reliance on foreign technology. By owning 100% of SMIC North, SMIC gains complete control over advanced wafer fabrication resources, enhancing operational coordination and strategic planning.
The deal also underscores continued government and industry support for semiconductor self-sufficiency, highlighted by the involvement of the China Integrated Circuit Industry Investment Fund. It is a strategic step towards building a robust, homegrown supply chain amid escalating global supply chain tensions and geopolitical uncertainties.
What to watch next
Market watchers will be focusing on the integration process post-acquisition and how swiftly SMIC can leverage full ownership of SMIC North to scale production and ramp up advanced technology nodes. The ability to optimize SMIC North’s 12-inch wafer fabrication services within SMIC’s broader operations will be key to driving competitiveness.
Additionally, government regulatory developments and further investment strategies within China’s semiconductor sector are critical to monitor. How this M&A shapes the competitive landscape domestically and influences SMIC’s international partnerships and market positioning will be important indicators of China’s semiconductor industry trajectory.