© mikael damkier Business | June 27, 2016

SMIC acquires LFoundry and enters into global automotive market

Semiconductor Manufacturing International Corporation (SMIC), one of China's largest dedicated semiconductor foundries, is acquiring a 70% stake of LFoundry Europe GmbH for a consideration of EUR 49 million.
The decision was jointly announced with LFoundry Europe GmbH (LFE) and Marsica Innovation S.p.A. (MI), the signing of an agreement on June 24, 2016 to purchase a stake of LFoundry.

LFoundry is an integrated circuit wafer foundry headquartered in Italy, which is owned by LFE and MI. At the closing, SMIC, LFE and MI will own 70%, 15% and 15% of the corporate capital of the target respectively. This acquisition is said to benefit both SMIC and LFoundry, through increased combined scale, strengthened overall technology portfolios, and expanded market opportunities for both parties to gain footing in new market sectors.

This also represents the Mainland China IC foundry industry's first successful acquisition of an overseas-based manufacturer, which marks a major step forward in internationalising SMIC; furthermore, through this acquisition, SMIC has formally entered into the global automotive electronics market.

This acquisition will bring both companies additional room for business expansion. At present, SMIC's total capacity includes 162'000 8-inch wafers per month and 62'500 12-inch wafers per month, which represents a total 8-inch equivalent capacity of 302'600 wafers per month. LFoundry's capacity amounts to 40'000 8-inch wafers per month. Thus, by consolidating the entities, overall total capacity would increase by13%.


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