Semiconductor Manufacturing International Corporation (SMIC), China's largest contract chipmaker, has cleared the final regulatory hurdle in the biggest acquisition ever seen in the country's wafer foundry industry. China's securities regulator has approved SMIC's plan to absorb the remaining stake in its Beijing-based subsidiary, Semiconductor Manufacturing North China (SMNC), in a deal valued at roughly US$5.97 billion.
What the regulator approved
The China Securities Regulatory Commission signed off this week on SMIC's proposed share placement, the last step in a process that began in September 2025. Under the plan, SMIC will issue about 547.2 million new A-shares to five SMNC shareholders, priced at 74.20 yuan (around US$10.91) each, for a combined 40.6 billion yuan. The sellers, who include the state-backed China Integrated Circuit Industry Investment Fund, accept a 12-month lock-up period on the new stock.
SMIC already owns 51% of SMNC, so the transaction will convert the unit into a wholly owned subsidiary. The Shanghai-listed chipmaker said the move will improve its asset quality, strengthen business synergy and support its long-term development. The deal had already been accepted by Shanghai's Star Market in February and passed the exchange's review earlier in May before reaching the securities regulator.
Why SMNC matters
Founded in 2013, SMNC operates 12-inch wafer fabs and serves as SMIC's primary manufacturing base in the Beijing area. The unit posted operating revenue of about 13 billion yuan and net profit of 1.7 billion yuan in 2024, and recorded roughly 9 billion yuan in revenue with 1.5 billion yuan in net profit over the first eight months of last year, underscoring its growing contribution to the parent company.
Consolidating full ownership gives SMIC tighter control over capacity at a time when Chinese chipmakers are racing to expand domestic production for artificial intelligence and other advanced applications. The restructuring echoes a broader wave of chip-sector dealmaking, including Analog Devices' $1.5 billion purchase of Empower Semiconductor aimed at high-density power chips for the AI era.
A bigger push for self-reliance
SMIC's 2025 revenue climbed more than 16% to about 67 billion yuan, while net profit rose 36% to roughly 5 billion yuan. According to TrendForce, the company's global wafer-foundry income reached about US$9.3 billion, ranking it third worldwide behind Taiwan Semiconductor Manufacturing Company and Samsung.
The buyout lands amid intensifying competition over semiconductor supply chains. Washington has weighed new restrictions on Chinese hardware, from proposed bans on Chinese ground robots to scrutiny of advanced manufacturing, while domestic and foreign players alike pour capital into fabrication, including the $20 billion TeraFab AI chip project. By folding SMNC fully into its operations, SMIC signals it intends to keep scaling China's homegrown chip capacity.
Reporting based on coverage from Yicai Global, China Money Network and South China Morning Post.