(Bloomberg)Semiconductor Manufacturing International Corp. will build a $2.35 billion plant with funding from the government of Shenzhen, the first major project to emerge from China’s masterplan to match the U.S. and become more self-reliant as global chip supply dwindles.

The company has agreed to a joint venture with the southern municipality in which it will develop and operate a chipmaking plant that can produce silicon of 28 nanometers or above, it said in a stock exchange filing. The partners aim to draw third-party investment, begin production by 2022 and eventually produce 40,000 12-inch wafers a month. Its shares rose as much as 3% in Hong Kong.

China has always wanted to build a group of technology giants that can stand shoulder-to-shoulder with Intel Corp. Beijing is moving swiftly to cut a dependence on the West for crucial components like chips, an issue that became more urgent after a global shortage of semiconductors worsened during the pandemic.