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SMIC could sell 20 percent stake to Datang

Semiconductor Manufacturing International Corp (SMIC, 中芯), China’s biggest chipmaker, could sell a stake of about 20 percent for 2 billion yuan (US$293 million) to Datang Telecom Technology & Industry Group (大唐電信), China Business News reported yesterday, citing an unidentified person familiar with the situation.

SMIC intends to sell a stake to a customer to secure chip orders and narrow the gap with market leader Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).

The reported investment would make Datang, developer of a local technology for high-speed wireless services, the biggest shareholder in the Chinese chipmaker.

SMIC requires “a strategic investor that would direct much more volume of advanced chips to them,” said Steven Pelayo, who rated the chipmaker “neutral” at HSBC Holdings Plc in Hong Kong.

The Shanghai-based chipmaker has a market value of HK$8.46 billion (US$1.1 billion). In April, the company reported a loss of US$119.1 million in the first three months, the fourth straight quarterly loss, because of costs for scaling back its computer-memory chip business.


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