In addition, on June 11, 2018, the company and its subsidiaries entered into a framework agreement with SMIC to provide for the supply of goods, to provide or receive services, to lease assets, to transfer assets, to provide technical authorizations or permits, and to provide guarantees. The agreement is valid from April 26, 2018 to December 31, 2019.
SMIC operates a 12-inch wafer fab with advanced process capacity. As the market demand for advanced processes continues to increase rapidly, the company will allocate some advanced process manufacturing to SMIC South to ensure that it will meet the company's future wafer production needs.
The business partnership between the company and SMIC has helped offset the duplication of procedures for the introduction and manufacture of advanced processes for IC design companies, thereby reducing the time between the two parties and the market and certain management expenses. By expanding capacity and continuing innovation, the company believes that Can enhance its position in the industry and benefit from the strengthening of economies of scale.