Following the construction of two 12-inch chip factories which are located in Beijing and Shanghai, respectively, Semiconductor Manufacturing International Corporation (SMI) now plans the construction of its third 12-inch chip factory in China.

SMIC's new factory will be opened in Wuhan and will be the first major project for SMIC that is done through financing and leasing. The construction of the factory is expected to be completed around the end of 2007.

The total investment of the Wuhan factory will be more than CNY10 billion, which shall be underwritten by the local Wuhan government. SMIC will rent the workshop and equipment there and allocate management and technicians.

SMIC may purchase the factory from the local government after three to five years' operation. There are also rumors that SMIC may separate its Shanghai factory and have it listed on the Shanghai A Stock market in order to explore a new financing channel for the company.