Semiconductor Manufacturing International Corporation (SMIC) is running based on the wishes of the municipalities of China to create clusters of high-tech strategy. In partnership with cities to build new factories semiconductor SMIC then operate under contract, the company could grow without facing major immediate capital expenditure. Unlike the model build-operate-transfer some municipalities used to build infrastructure such as new subway Shenzhen, the “Reverse BOT model” township built a factory SMIC labor and capital SMIC might work, greatly reduce the the capital costs. This model has given the company a unique level of flexibility in an industry where investment costs were the main driver of product costs.
Source: Harvard Business School
Date Posted: January 6, 2009. Prod #: 609062-PDF-ENG
Semiconductor Manufacturing International Corporation: Case Solution “BOT Reverse”