LFoundry, a Semiconductor Manufacturing International (SMIC) company, has entered into a binding agreement with SMIC for the latter to sell all of its stakes in the former to Jiangsu CAS-IGBT Technology.

Headquartered in Avezzano, Italy, LFoundry is 70% owned by SMIC as a result of a share purchase agreement reached in 2016.

LFoundry said the the production capacity of the Avezzano plant - focused on the automotive sector, as well as security and industrial applications, such as CMOS image sensors, smart power and embedded memory - will provide Jiangsu CAS-IGBT a "unique platform" from which to grow existing and new lines of businesses.

Jiangsu CAS-IGBT focuses on the research, design and development of new power and electronic chips such as insulated gate bipolar transistors (IGBT) and fast recovery diodes (FRD).

The agreement reached between LFoundry and SMIC is the first step towards the formal acquisition, whose finalization is scheduled for the end of June 2019.