China injects $2.2 billion into local chip firm

The Semiconductor Manufacturing International Corp. plant’s registered capital jumps from $3.5 billion to $6.5 billion after the investment, the company said in an announcement.

SMIC is planning a Shanghai share sale that could raise more than $3 billion, based on its closing value of more than $13 billion on Friday. (Pixabay)

China's state-backed funds pumped $2.25 billion into a Semiconductor Manufacturing International Corp. wafer plant to support advanced-chip making as Washington tightens technology restrictions on the Asian nation.

The chipmaker's stake in the Shanghai facility will drop from 50.1% to 38.5%, it said. The plant has capacity to produce 6,000 14-nanometer wafers a month and plans to boost that to 35,000.

The new investment came as Washington moved to prevent sales to Huawei Technologies Co. by chipmakers using U.S. technology. The Commerce Department on Friday said it would require licenses before allowing U.S. technology to be used by the Chinese company or its 114 subsidiaries, including its chip-design unit HiSilicon.

SMIC is planning a Shanghai share sale that could raise more than $3 billion, based on its closing value of more than $13 billion on Friday. China is betting the local chipmaker can reduce the country's reliance on U.S. technology.