SMIC wins regulator nod for $6bn SMNC buyout on Star Market
Synopsis
China's securities regulator has approved SMIC's plan to issue 547.2 million A-shares to absorb the remaining 49% of its Beijing foundry SMNC in a deal worth US$5.97 billion — set to be the largest-ever merger on Shanghai's Star Market and a major consolidation of state-backed chip capacity.
Key Takeaways
China's securities regulator approved SMIC 's share issuance plan on 22 May 2026 , the final regulatory step in the acquisition process.
The deal values SMNC 's 49 per cent stake at 40.6 billion yuan (US$5.97 billion) , making it the largest restructuring deal on Shanghai 's Star Market .
547.2 million new A-shares will be issued at 74.20 yuan (US$10.91) each, subject to a 12-month lock-up for sellers.
The China Integrated Circuit Industry Investment Fund (Big Fund) is the largest seller, receiving 357.3 million of the new shares.
SMIC said pro forma basic EPS would have risen from 0.49 yuan to 0.55 yuan for January–August 2025 had the deal been completed.
SMNC , founded in 2013 , will become a wholly owned subsidiary of SMIC upon deal completion.
Semiconductor Manufacturing International Corporation (SMIC), China's largest wafer foundry, has secured final regulatory approval to acquire the remaining 49 per cent stake in its Beijing-based unit Semiconductor Manufacturing North China (Beijing) Corporation (SMNC), clearing the last hurdle for what is set to become the biggest merger and restructuring deal on Shanghai's Star Market.
Regulator greenlights share issuance
China's securities regulator approved SMIC's plan to issue 547.2 million A-shares to five shareholders of SMNC, according to an exchange filing published on Thursday, 22 May 2026. The approval carries a validity of 12 months, allowing the country's biggest contract chipmaker to proceed with share issuance and related asset purchase procedures without further regulatory intervention.
Deal size and structure
The planned transaction values the 49 per cent stake at 40.6 billion yuan (US$5.97 billion), according to SMIC's registration filing. New shares will be issued at 74.20 yuan (US$10.91) apiece, with a 12-month lock-up period imposed on sellers. Upon completion, SMNC will become a wholly owned subsidiary of SMIC, which already controls the remaining 51 per cent.
State-backed investors are the sellers
SMIC is acquiring the stake from a consortium of state-linked investors: the China Integrated Circuit Industry Investment Fund — widely known as the Big Fund — the Beijing Semiconductor Manufacturing and Equipment Equity Investment Centre, Beijing E-Town International Investment & Development, Zhongguancun Development Group, and Beijing Industrial Investment. The Big Fund will receive the largest allocation of new shares, at 357.3 million.
Why it matters
SMNC, founded in 2013, specialises in 12-inch wafer foundry services and serves as a critical manufacturing base for SMIC in Beijing. According to the company's filing, the acquisition is expected to lift SMIC's net profit and earnings per share while leaving its core business unchanged. On a pro forma basis, SMIC said its basic earnings per share from January to August 2025 would have risen from 0.49 yuan to 0.55 yuan had the transaction been completed during that period.
What's next
The regulatory process that began in August 2025 — when SMIC first disclosed the planned acquisition — has now run its full course. The transaction price and preliminary plan were announced on December 30, the deal was accepted by the Star Market on February 25, and the exchange's review committee passed it on May 11. With approval secured, attention now shifts to the formal share issuance and the timeline for completing the full consolidation of SMNC into SMIC's balance sheet — a move that will further concentrate China's domestic semiconductor manufacturing capacity under a single, state-aligned entity.
Point of View
Internationally visible benchmark for domestic semiconductor valuation — a soft-power dimension to a deal framed purely as industrial consolidation. Investors should watch whether the 12-month share lock-up expiry triggers secondary selling pressure and how quickly the unified balance sheet enables SMIC to accelerate capacity expansion at the Beijing fab.
NationPress
7 Jul 2026
Frequently Asked Questions
What is the SMIC and SMNC merger deal?
SMIC is acquiring the remaining 49 per cent stake in Semiconductor Manufacturing North China (SMNC) for 40.6 billion yuan (US$5.97 billion) through a share-based transaction. China 's securities regulator granted final approval on 22 May 2026 , allowing SMIC to issue 547.2 million A-shares to complete the buyout.
Why is the SMIC-SMNC deal significant?
The deal is set to be the largest merger and restructuring transaction on Shanghai 's Star Market . It consolidates China 's key 12-inch wafer foundry capacity under a single entity and is expected to improve SMIC 's earnings per share, according to the company's own pro forma calculations.
Who are the sellers in the SMIC-SMNC acquisition?
Five state-linked investors are selling their combined 49 per cent stake: the China Integrated Circuit Industry Investment Fund (Big Fund) , the Beijing Semiconductor Manufacturing and Equipment Equity Investment Centre , Beijing E-Town International Investment & Development , Zhongguancun Development Group , and Beijing Industrial Investment . The Big Fund receives the largest share allocation at 357.3 million shares .
How will the SMIC-SMNC deal affect SMIC's earnings?
According to SMIC 's filing, basic earnings per share would have risen from 0.49 yuan to 0.55 yuan for the period January to August 2025 on a pro forma basis if the deal had been completed. The acquisition is expected to lift net profit while leaving SMIC 's core business operations unchanged.
What happens next after regulatory approval for the SMIC deal?
SMIC can now proceed with the formal share issuance at 74.20 yuan (US$10.91) per share and complete related asset purchase procedures within the 12-month approval window. Once finalised, SMNC will become a wholly owned subsidiary of SMIC , marking full consolidation of the Beijing -based foundry.
