TAIPEI (Taiwan News) — A US$20 billion semiconductor manufacturing project backed by the Chinese government has gone belly-up, as its key operator Wuhan Hongxin Semiconductor Manufacturing Co. (HSMC) announced its decision to dismiss all employees on Friday (Feb. 26).

Employees at the company, which was once touted as part of Beijing's plan to become a self-sufficient chipmaker, were "asked to resign" by Monday via a WeChat message, according to Chinese media reports. The company made clear that it had "no plan to resume production," which has been halted since late 2019 due to failure to attract more investors.

Some reports suggested that as many as 240 people would lose their jobs at the semiconductor plant. Employees were quoted as saying that HSMC had not offered an explanation for its closure or any compensation.

Launched in November 2017, HSMC had a planned investment of US$20 billion and a leadership team of former Taiwan Semiconductor Manufacturing Company (TSMC) executives, including Chiang Shang-yi (蔣尚義), TSMC's former chief operating officer, as its CEO. It was said to be able to create 50,000 jobs, directly or indirectly, and have an annual output of US$9.25 billion once running at full capacity.

In 2019, the project came to a halt due to irreconcilable gaps in funding, and the status of the public money sunk into it was left unaddressed. Meanwhile, describing his experience with HSMC as a "nightmare," Chang left the company in mid-2020.

Following Chang's resignation, reports that described HSMC as a "multi-billion chipmaking fraud" began to surface. Builders and contractors complained about delayed payments, while some reports suggested that most of its employees did not have any background in semiconductor manufacturing, as had been claimed.