Datang Telecom Technology & Industry Holdings has agreed to acquire US$102 million worth of Semiconductor Manufacturing International Corporation (SMIC) shares to bring its stake in the foundry chipmaker to 20%, according to a Chinese-language sina.com report.

The report said SMIC will use the new funds mainly to expand advanced process capacity at its 12-inch fabs.

Datang, directly owned by China's central government, is currently the majority shareholder of SMIC with a 16.6% stake.

In February, SMIC confirmed it was in talks with a potential investor regarding a possible capital injection plan but said nothing had been decided. The statement was issued after a Reuters report cited unnamed company sources indicating SMIC would draw new investment from Datang.