The largest domestic wafer foundry acquisition! SMIC's 40.6 billion yuan plan approved

On May 11, the Shanghai Stock Exchange Mergers and Acquisitions Review Committee held its fifth review meeting of 2026, officially approving SMIC (688981.SH) to issue shares to purchase assets and related-party transactions. This deal will become the largest merger and acquisition in the history of the domestic wafer foundry industry.

According to the previously disclosed restructuring plan, SMIC intends to issue shares to five shareholders, including the National Integrated Circuit Industry Investment Fund, to purchase their combined 49% stake in SMIC North, with a transaction price of approximately 40.6B yuan. After the transaction is completed, SMIC’s stake in SMIC North will increase from 51% to 100%, achieving full ownership.

From the joint venture factory established in 2013 to full acquisition today, this thirteen-year-long “marriage” has finally unified.

Public information shows that SMIC North was established in 2013, jointly founded by SMIC Beijing, Zhongguancun Development Group Co., Ltd., and Beijing Industrial Development Investment Management Co., Ltd., and is currently one of the major domestic wafer foundry companies.

According to previously disclosed financial data, in 2023, 2024, and January–August 2025, SMIC North’s operating revenues were 11.58B yuan, 12.98B yuan, and 9.01B yuan, respectively; during the same period, the company’s net profits were 585 million yuan, 1.68B yuan, and 1.54B yuan. Among them, SMIC North’s profits mainly come from 12-inch integrated circuit products.

Why acquire full ownership at this time? SMIC states that SMIC North, as a controlling subsidiary of SMIC, mainly provides 12-inch integrated circuit wafer foundry and supporting services across different process platforms for customers. This transaction will help further improve the asset quality of the listed company, enhance operational synergy, and promote the long-term development of the company. The main business scope of the listed company will not change before and after the transaction.

Currently, SMIC is the largest wafer foundry enterprise in China. In 2025, its revenue is projected to be 67.32B yuan, a year-on-year increase of 16.49%; net profit attributable to the parent is 5.04B yuan, up 36.29%. According to Jibang Consulting, in 2025, its global wafer foundry revenue will be approximately $9.33B, ranking third worldwide, behind TSMC and Samsung. After the transaction, SMIC states it can more flexibly allocate SMIC North’s capacity and achieve full coordination of technology and management resources.

However, full ownership also brings concerns. Competition in the mature process field is intensifying, and price pressures are significant. On one hand, domestic wafer foundries are expanding mature process capacity on a large scale, with global market share expected to increase from 33% in 2024 to 45% in 2027. On the other hand, weak consumer electronics demand has led to supply exceeding demand growth. Additionally, with major IDM manufacturers like UMC and GlobalFoundries fighting back, balancing high investment with profitability remains a core challenge that SMIC’s management must address.

(Source: Yicai Global)