Semiconductor Manufacturing International Corporation (SMIC), whose US$768 million loan application to the American Import and Export Bank was turned down, has now turned to China's domestic banks for a loan of US$600 million.

Analysts in Hong Kong media reports speculate on two reasons why SMIC's request was not granted in the US. One is that American chip manufacturers and politicians are worried that the ever-growing SMIC will cause more employment losses for Americans. The other is that international banks are still concerned about the global chip industry and the prospects for firms like SMIC.

SMIC provides services to a number of giant clients, including Samsung and Infineon. In order to expand its production capacity, the company planned to introduce US$870 million worth of equipment from the US to its Beijing factory, one of the most advanced n China that specializes in 12-inch chip production. After its US loan application was refused, it has threatened to buy the equipment from Japanese manufacturers.

The banks that SMIC is lobbying for the loan are as-yet unnnamed.


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