China’s top chip maker SMIC gets fast-track approval for US$2.82 billion fundraising plan to bolster capital in global tech war
- The biggest fundraising plan on Star Market gets approved by the Shanghai stock exchange within 18 days
- Company says US laws restricting its access chip suppliers could curb output and sales
The Shanghai Stock Exchange on Friday approved a plan by Semiconductor Manufacturing International Corporation (SMIC) to raise 20 billion yuan (US$2.82 billion) on its fledgling Star Market to help develop a new chip and replenish capital.
The greenlight came 18 days after the company submitted its plan, making it the fastest approval process since the Shanghai exchange was established in 1990.
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Amec was among the first batch of debutants when the Star Market for technology companies was launched on July 22 last year. The board itself came to being at a record speed of about eight months at the behest of President Xi Jinping.
Beijing is looking to stay ahead in the technology race as the US steps up efforts to curb China’s ascendancy in the industry, leading to a long-running spat covering trade, intellectual property and national security.
Those efforts included a new law barring chip makers using equipment produced by American companies from supplying parts to Chinese smartphone maker Huawei Technologies.
Chip maker SMIC plans to raise US$2.8 billion on Shanghai’s Star Market as US moves to stifle China’s tech ambitions
China itself has moved to offer tax breaks, ease stock market listing requirements and provide funding to home-grown chip producers to ensure the industry's self-sufficiency.
Hong Kong-listed SMIC’s fundraising is also the largest yet on the Star Market. While SMIC needs another go-ahead to start a bookbuilding, it’s typically regarded as a certainty. Its prospectus highlights the US rule as a potential risk to its business, saying it would curtail its production and sales.
“With the country’s top chip maker becoming a member of the board, the Star Market is playing an increasing role in pushing ahead with China’s technology advancement,” said Ding Haifeng, a consultant with Shanghai-based financial advisory firm Integrity.
