The chip manufacturer SMIC wants to become less dependent on other countries for the supply of chips.
In recent months it has become clear that there is a worldwide shortage of, among other things, semiconductors.
Semiconductor Manufacturing International Corporation (SMIC) is to build a huge chip factory in Shenzhen, China. China wants to become less dependent on other countries to supply chips, which are in short supply worldwide.
The $ 2.35 billion projects are being co-funded by the Chinese government.
SMIC warns that the shortage of chips could become even more significant this year and next year. Chinese companies could suffer considerably if the country does not increase the production of semiconductors. Production at the new plant is expected to begin by 2022.
The US government blacklisted the chip manufacturer at the end of December. According to Washington, the chip manufacturer has close ties with the Chinese military.
The company itself denies and says it does not make any products for military use at all. The sanctions make it much more difficult for SMIC to buy American products and technology.