Loongson files US$542 million IPO on Star Market as China’s home-grown chip maker raises capital to fund its growth

Beijing-based Loongson aims to sell up to 41 million shares to raise 3.5 billion yuan on Shanghai’s Nasdaq-like Science and Technology Board

The fund raise will be used for the development of chip production, research into GPUs and liquid capital

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A piece of Loongson’s 3A processor installed on the motherboard of the KD-60 supercomputer at the China University of Technology in the Anhui provincial capital of Hefei on 21 April 2010. Photo: Imaginechina.

Published: 1:19pm, 29 Jun 2021Updated: 9:53pm, 29 Jun 2021

Loongson Technology, a producer of semiconductor chips under China’s largest scientific think tank, has filed an initial public offering (IPO) in Shanghai, raising capital to finance its role in spearheading the country’s attempt at developing its own home-grown chip.

The company, based in the Chinese capital city, aims to sell up to 41 million shares to raise 3.5 billion yuan (US$542 million) on Shanghai’s Nasdaq-like Science and Technology Board, better known as the Star Market, according to its prospectus. The listing, equivalent to 10 per cent of its capital, involves Loongson issuing new stock, the company said.

Loongson’s fundraising is another move by China’s state-led industrial sector to amass the financial and technological muscles to stake its turf in next-level technology. The development and production of home-grown chips and integrated circuits is one of the 10 priorities under the Made in China 2025 industrial master plan.

China imported US$260 billion worth of semiconductors in 2017, more than its US$162 billion imports of crude oil. US companies dominate the semiconductor industry, while domestic suppliers can only satisfy 5 per cent of China’s annual demand, according to Chinese official data.

SCMP Infographics: Semiconductors and the Made in China 2025 industrial master plan

Loongson began in 2001 as a research team under the Chinese Academy of Sciences, the country’s apex of scientific and technological research, and was spun out as a separate entity in 2010 to commercialise its chip development research.

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