China’s top chipmaker, Semiconductor Manufacturing International Corp. (SMIC), has joined the growing number of chipmakers aiming to expand production as global chip shortage buoyed by covid-19 pandemic skyrockets demand. The company said on Friday that it will build a nearly $9 billion chip plant in Shanghai, giving hope to Chinese manufacturers, including Huawei, who have been caught in the heat of chip shortage.

According to a report, the plant will be Semiconductor Manufacturing International Corp.’s biggest investment in years and will churn out older-generation chips that are currently in short supply for everything from consumer electronics to self-driving cars.

SMIC said in a stock exchange filing that it has agreed with the Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone to form a joint venture to build and operate the plant. Capacity is planned to reach 100,000 wafers a month, with a total investment of $8.87 billion.

The plant will make chips using 28-nanometer production tech or older, which is suitable for such chips as image sensors, Wi-Fi chips, driver ICs and microcontrollers, many of which are in extremely short supply. The most advanced chips on the market are made using 5-nm technology for iPhone processors and Mac CPUs.

The move challenges Taiwan Semiconductor Manufacturing Company (TSMC), the world’s biggest contract chipmaker, which announced a similar move this year. TSMC said it will spend $2.8 billion to expand its production capacity in the Chinese city of Nanjing for 28-nm tech to tap growing local demand. Other global peers, including Globalfoundries and United Microelectronics, are also aggressively expanding capacity.

The registered capital of SMIC’s joint venture will be $5.5 billion, according to the filing, with the chipmaker taking at least a 51% stake and shouldering responsibility for its operations and manufacturing. The Shanghai government will take a 25% stake and third-party investors will be sought for the remainder, the filing said. It was not immediately clear when the new facility is slated to begin production

SMIC announced this year that it will jointly invest in a $2.35 billion chip project with the Shenzhen government to churn out 40,000 wafers a month in the southern Chinese city, starting in 2022.

Last September, SMIC was added to the U.S. Commerce Department’s Entity List, which bans the unlicensed exports of American technology to the company.

SMIC co-CEO Zhao Haijun has confirmed several times that the U.S. blacklisting has hindered the company’s development of more advanced technologies, which rely more heavily on American equipment suppliers such as Applied Materials and Lam Research. Zhao said his company is looking for alternative solutions while continuing to communicate with the U.S. government.

SMIC is China’s most promising contract chipmaker and thus shoulders many of Beijing’s hopes for building a self-reliant chip industry.

Recently the company has benefited from a surge in prices for chipmaking services as global electronics manufacturers and automakers battle an unprecedented shortage of semiconductors. SMIC is a key production partner for many Chinese chip developers, as well as U.S. chip developer Qualcomm. The company reported record earnings for the first half of 2021, thanks to higher prices and robust demand.

The plant will also help China to bridge its wide semiconductor gap with the US, and ease the strains of US sanctions on Chinese industries.

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It took the efforts of the secret Police to stop those who came to recruit Nigerian doctors to give up a few weeks ago. Some Nigerian doctors are still on strike and the government is still speaking grammar when citizens are dying daily due to lack of healthcare services. It is very unfortunate indeed: “More than 7 in 10 Nigerians (73 per cent) have said they would relocate abroad with family members if they had an opportunity, a new survey published this week has found.”

“Most of the citizens (74 per cent) believe that all Nigerians are not equal before the law; versus 23 per cent who feel otherwise. About 6 in 10 Nigerians (58 per cent) express the view that the federal government isn’t making enough effort to promote a sense of inclusion for all ethnic groups in the country,” a summary of the report further showed.

“The survey findings showed that only 63 per cent of citizens are “extremely or somewhat willing” to cooperate with fellow citizens to make Nigeria more united.

Nigeria is the only country where everyone is a victim. It took the efforts of the Chief Justice to warn the judges to stop the mindless counterintuitive political calls they have been making recently. Yes, 1+1 = 2; one judge will rule. Another from another place will call it 3. Simply, you wonder how a nation can be run that way. From law to healthcare to sports to [add yours], it is a domino!

China’s new “common prosperity” goal is gaining the support of the country’s big men who have been caught in the web of policy shifts recently, and are working hard to appease the Chinese Communist Party.

Increasing number of business leaders in China have pledged to support President Xi Jinping’s campaign – among them is Alibaba. The e-commerce giant is throwing 100 billion yuan ($15.5 billion) into the “common prosperity,” goal, augmenting the pledge from other Chinese companies including Tencent and Pinduoduo.

These companies are acting in response to Xi’s call last month for “reasonable adjustment of excessive incomes” urging high income groups and businesses to “return more to the society.”

Alibaba said the fund will be invested in these five key areas by 2025: innovation in technology, economic development, the creation of “high-quality employment,” supporting vulnerable communities, and setting up a special development fund.

“Alibaba is a beneficiary of the strong social and economic progress in China over the past 22 years. We firmly believe that if society is doing well and the economy is doing well, then Alibaba will do well,” Chairman and CEO Daniel Zhang said in a statement Friday.

“We are eager to do our part to support the realization of common prosperity through high-quality development,” he added.

The tech giant will also set up a “Prosperity Advancement Working Committee,” that will be headed by Zhang.

Alibaba’s plan includes other 10 specific goals which involve increasing technological investment in the country’s less developed regions, improving the welfare of gig economy workers and working to speed up the growth of small businesses and agriculture.

Similarly, other major Chinese tech firms, Pinduoduo and Tencent are donating toward the goal. Pinduoduo pledged to hand over its entire profit for the last quarter to rural development projects in the country.

The e-commerce company said last Tuesday that it would donate $372 million to the development of China’s agricultural sector and rural areas, with plans to give away 10 billion yuan ($1.5 billion) toward similar causes overall.

The move was notably bold for Pinduoduo. Per Nikkei, the US-listed firm had just posted a profit for the first time as a public company in the quarter ended June.

Following the growing trend, Tencent announced last month that it would dedicate 50 billion yuan ($7.7 billion) toward achieving Beijing’s goal of “common prosperity.” The company said it would aim to help increase income for the poor, and address education inequality, among other initiatives.

The bottom line

The “common prosperity” goal is a segment of policy changes that Beijing has, without warning, unveiled recently. And it came with an avalanche of impacts that are sweeping through China’s tech ecosystem now.

Last year, when Chinese authorities abruptly halted proposed Ant Group’s IPO, which would have toppled Saudi Aramco’s world’s largest IPO record, many companies in China didn’t know it’s the beginning of an elaborate crackdown that would take them by storm and spiral into redistribution of wealth.

As Beijing opened the chapters of the crackdown, many of the companies found themselves in paragraphs written with unfavorable ink for issues ranging from anti-competition to misuse of private data.

Since this year, many companies including Alibaba which was hit with a record $2.8 billion fine for acting like a monopoly, Tencent, Didi etc. have received a stroke of disapproval from market regulators who handed the firms fines and sanctions.

However, the bottom line appears to be getting clearer, China doesn’t want a class of rich people separated from others by miles of wealth. Consequently, it dawned on the South Asian giant, when last year, Jack Ma dared to criticize its policies, that it’s time to slash the burgeoning wealth before its over-bloated beneficiaries get intoxicated by it and forget what China stands for.

For Chinese companies and business leaders, the only choice is to say yes and accept every condition given. When in April Alibaba was handed the $2.8 billion fine, the company could only say thank you, promised to make amends and to cooperate with the authorities, while in the US, its counterparts are in courts challenging regulators’ decisions.

With no freedom to question the decisions of the authorities, business leaders in China have learnt that the easiest way to survive in their clime, where the control of everything belongs to the Communist Party, is to sing along every chorus orchestrated in Beijing – and “common prosperity” is the latest.