China’s No 2 chip maker seeks Shanghai listing to expand capacity, as Beijing continues to back self-sufficiency drive
- The size of Hua Hong’s issuance will be up to 25 per cent of the company’s inflated share base
- Hua Hong’s expansion plan comes at a time when China is doubling down on a self-sufficiency drive for chips
Hong Kong-listed Hua Hong Semiconductor, China’s second-biggest chip maker, said it will seek a secondary listing on Shanghai’s Star board to expand capacity, according to a company statement.
Hua Hong said in a statement on Monday that the company’s board had approved a plan to issue yuan-denominated new shares and list them on the Science and Technology Innovation (STAR) Board of the Shanghai Stock Exchange to fund expansion of its main chip-making operations.
The size of the issuance will be up to 25 per cent of the company’s inflated share base. Hua Hong did not specify the actual amount to be raised, but the capital raising could be worth HK$15 billion (US$2 billion), according to Hong Kong media reports.
Hua Hong’s expansion plan comes at a time when China is doubling down on a self-sufficiency drive for chips, amid rising tech tensions with the US and as America and Europe also boost their onshore semiconductor production capabilities.
China’s import volume of integrated circuits (ICs) in the first two months of 2022 fell 4.6 per cent compared with the same period last year, marking the first year-on-year drop since the beginning of 2020, according to data from the General Administration of Customs.
