SMIC Photo: CFP

Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC) announced on Tuesday that it has agreed to transfer 22 percent of the shares of its Shenzhen subsidiary to the state-owned China Integrated Circuit Industry Investment Fund II, China's second semiconductor investment fund. The shares subscribed by SMIC are equivalent to about $531.3 million.

The move will help China's largest chipmaker further optimize shareholding structure and integrate multiple resources, paving the way to accelerate its business development in Shenzhen, South China's Guangdong Province, according to a statement from SMIC sent to the Hong Kong Stock Exchange.  

SMIC's shares in the Shenzhen company will decrease from 77 percent to 55 percent after the deal is completed. 

The Shenzhen subsidiary is jointly owned by SMIC and an investment fund backed by Shenzhen government, with the latter holding 23 percent of shares. The Shenzhen company will focus on mature chipmaking technologies of 28 nanometers and above with the aim of producing 40,000 12-inch wafers per month. Production at the new factory is expected to begin in 2022.