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Chip maker SMIC more than doubles Shanghai share sale to US$6.5 billion after spike in Hong Kong-listed stock

  • China’s top semiconductor foundry prices share at 27.46 yuan each
  • Deal’s underwriter has the option to expand the offer size by 15 per cent

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Chinese employees dressed in dustproof clothing work at SMIC’s chip foundry in Beijing, in this file photo from August 2012. The chip maker is raising funds in Shanghai to boost its war chest amid ongoing tensions with the US.
Reuters

China’s Semiconductor Manufacturing International Corp (SMIC) will raise 46.29 billion yuan (US$6.55 billion) in a Shanghai share sale, more than double its initial target, pricing its offering following a surge in its Hong Kong-listed stock.

The company, which had originally sought to raise about 20 billion yuan, set the sale price of its shares to be traded in Shanghai at 27.46 yuan each, it said in a filing to the Shanghai Stock Exchange on Sunday.

The offering values the company at 109.25 times its 2019 earnings, based on the expanded share base, according to the filing. By comparison, rival Taiwan Semiconductor Manufacturing Co (TSMC) has a trailing price-earnings ratio of 21.315.

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SMIC’s fundraising comes as the Shanghai-based firm bulks up its war chest amid broader tech-related tensions between the United States and China, and will be used to fund projects and replenish operating capital.

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Established in 2000, SMIC is mainland China’s top semiconductor foundry and competes with Taiwan-based TSMC, which has more advanced technology.
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