Mainland chip foundry CSMC Technologies may seek to raise additional funds after its Hong Kong initial public offering - a task that could prove difficult amid poor sentiment as investors fret over efforts to rein in China's galloping economy. According to reports, CSMC plans to raise about US$100 million, against earlier expectations of $200 million, although a market source said the final figure had not yet been set. The chipmaker, based in Wuxi, Jiangsu province, is just the latest mainland company to scale back or delay fund-raising plans. China Telecom Corp plans to raise at least HK$18.6 billion to buy networks from its parent, but a quick sale appears in doubt as market uncertainty grows. A source close to placement agent Morgan Stanley said the fixed-line carrier could place the shares at any time over the next 12 months and would wait for the best time. Last month, rival China Netcom cut the size of its share offering to between US$1.5 billion and $2 billion, from an earlier target of $2 billion to $2.5 billion. It also pushed back the issue by two months. The reduced ambitions come amid already weak market sentiment, exacerbated by yesterday's 3.57 per cent fall in the Hang Seng Index and 7.71 per cent drop in the H-share index. For the year, the indices are down 8.67 and 22.37 per cent, respectively. According to a research report by sponsor Citigroup, CSMC plans to spend US$76 million this year boosting production at its six-inch plant and a further $322 million to build an eight-inch wafer facility. Although profitable, CSMC suffered from weak cash flow, with its ratio of capital expenditure to earnings before interest tax depreciation and amortisation at more than 150 per cent over the past three years. 'This suggests the company will need cash injections through raising equity and debt or issuing new shares,' Citigroup analyst Andrew Lu wrote. Market watchers said CSMC might not be able to raise the funds it needed should the peaking cyclical semiconductor demand begin to turn. 'If you don't get all the money you need now, it's going to be difficult to get it later,' a Hong Kong-based fund manager said. 'If you do come back to the market, you'll do it in conditions that are not advantageous to you.' CSMC would be the second mainland chipmaker to list following the US$1.79 billion flotation of Semiconductor Manufacturing International Corp (SMIC) in March. SMIC has also said it may need to tap the markets again. However, the similarities between CSMC and SMIC end there. CSMC employs depreciated second-hand equipment while SMIC uses new, more expensive tools.