China to spend billions on another fab offering mature nodes — YDME formed to operate new $4.6B facility

China has established the Beijing Yandong Microelectronics (YDME) semiconductor company, destined to operate a 300mm fab that will cost around $4.6 billion to get up and running. The chipmaker will be supported by BOE Technology and will produce microelectronics on mature process technologies, such as 28nm and above, reports the South China Morning Post.

This semiconductor industry project will be spearheaded by YDME, a state-owned company listed on Shanghai’s Star Market, which is set to control a 24.95% stake in the facility. BOE Technology, a leading display manufacturer and supplier to major brands like Apple, is also involved, contributing $277 million for a 10% ownership. Other significant participants include Beijing Yizhuang Investment, state-owned Capital Operation and Management, and ZGC Group, which will collectively invest $2.765 billion, with the rest funded through loans.

YDME’s fab is set to have a capacity of 370,000 wafer starts per month (WSPM) by 2027 and will use process technologies of 28nm and older. The fab will deliver a significant contribution to China’s aim to become self-sufficient in the production of microelectronics. China aims to increase its local production rate of chips from 16.7% in 2021 to 21.2% by 2026.

Currently, Beijing’s semiconductor infrastructure is less developed than the Yangtze River Delta region around Shanghai, which has more established manufacturing and back-end processing capabilities. This new fab will enhance Beijing’s chipmaking ecosystem by expanding its manufacturing, packaging, and testing resources, allowing it to better compete in the semiconductor sector.

This project, however, is pending approval from YDME shareholders and the Beijing State-owned Assets Supervision and Administration Commission, with expectations that the approvals will move forward to support the nation’s broader technology goals.

Other Chinese companies are making similar moves, with recent announcements from firms like Huahong Semiconductor, China Resources Microelectronics, and Guangzhou ZenSemi about 300mm wafer fab projects.