SMIC Photo: CFP

Semiconductor Manufacturing International Corp (SMIC), China's largest contract chipmaker has won a land auction in Shenzhen, south China's Guangdong Province, following a reported escalating crackdown by the US.

The company has won the bid for 20.1 million yuan. The land covered land area of 34,703 square meters and will be used for a new facility for a 12-inch wafer foundry production line, the Shenzhen Economic Daily reported.

In March SMIC has signed a cooperation framework agreement with the Shenzhen Municipal People's Government to produce 28nm and above integrated circuits and provide technical services at its production base in Pingshan, Shenzhen, with an aim to deliver approximately 40,000 units of 12-inch wafers per month. The new investment in the project is estimated to be worth $2.35 billion with production expected to start in 2022, according to an announcement by the company.

Bloomberg reported on Wednesday that the Biden administration was considering imposing tougher sanctions against SMIC, after it is blacklisted by the US last year that banned its access to advanced manufacturing equipment from US suppliers due to its so-called "ties" to China's military.

At a press conference on Wednesday, Zhao Lijian, a spokesperson for the Chinese Foreign Ministry said that China is "seriously concerned" about the reported move and vowed to defend Chinese companies' legitimate rights and interests.

Global Times