China’s No 2 foundry Hua Hong invests US$2b in new fab to meet surging AI-driven demand

China’s No 2 foundry Hua Hong invests US$2b in new fab to meet surging AI-driven demand Project is via a joint venture with state-backed investment entities under China’s National Integrated Circuit Industry Investment Fund Major Chinese foundry Hua Hong Grace Semiconductor is pouring US$2 billion into a massive capacity expansion in the Chinese chip production hub of Wuxi, racing to meet skyrocketing domestic demand for AI infrastructure and bypass US tech curbs. The fresh capital would fund the construction of a new 12-inch speciality line, its third facility in the eastern Chinese city, the country’s second-largest contract chipmaker said in a filing to the Hong Kong stock exchange on Tuesday. Once fully operational, the expansion will add 55,000 wafers to its monthly production capacity, equal to a roughly 30 per cent increase in its total capacity in Wuxi. Hua Hong and its Shanghai subsidiary providing US$1 billion and US$1.1 billion respectively, holding a controlling 51 per cent stake, while the state entities will provide the remaining capital. The state capital injection will bring total funding for the project to US$4.2 billion, according to the filing.