Chip maker SMIC plans to raise US$2.8 billion on Shanghai’s Star Market as US moves to stifle China’s tech ambitions
- Semiconductor Manufacturing International (SMIC), which delisted from NYSE a year ago, plans to raise 20 billion yuan (US$2.8 billion) on the mainland’s Nasdaq-style Star Market
- The biggest listing since the Star Market’s inception last July comes as Washington raises the barriers to Chinese tech firms
Top Chinese chip maker Semiconductor Manufacturing International (SMIC) plans to raise 20 billion yuan (US$2.8 billion) on the mainland’s Nasdaq-style Star Market as the US moves to make life more difficult for its rival’s technology companies.
The Hong Kong-listed company, which withdrew its American depositary receipts (ADRs) from the New York Stock Exchange a year ago, said in a listing prospectus it would use the proceeds from what would be the Star Market’s biggest offering to date to develop its latest 12-inch SN1 chip and replenish capital.
“The Star Market is now playing its role as a strategic fundraising platform to bolster the country’s own technology companies as the US-China relationship worsens,” said Zhou Ling, a fund manager with Shanghai Shiva Investment.
Based on the volume of 1.686 billion shares SMIC aims to will float, the company is expected to offer the shares at about 11.9 yuan a piece, a roughly 30 per cent discount to its so-called H shares, traded in Hong Kong. Those shares rose 1.5 per cent to HK$18.46 (US$2.38) on Tuesday morning.
SMIC is the mainland’s dominant semiconductor foundry and a key chip maker that Beijing is looking to support as the US administration moves to curb China’s rise in the technology industry.
In mid May, the company received US$2.25 billion of investments from a clutch of Chinese state investors, that will be used to fund expansion of a facility in Shanghai.
The plant’s capacity of 6,000 14-nanometre wafers a month will be increased to 35,000, SMIC said.
The US Department of Commerce took drastic action last month to stifle China’s hopes of becoming a world-beater in the tech field.