Tech war: fresh funding pipeline enables China’s sanctions-hit semiconductor industry to cope with latest US trade restrictions

China’s sanctions-hit semiconductor industry is poised to receive a much-needed lifeline via capital raised from new public listings and mutual funds, according to the latest stock market filings and financing data, as Beijing doubles down on the country’s chip self-sufficiency drive amid tightened US trade restrictions.

The initial public offering (IPO) applications of nine entities in China’s semiconductor supply chain – including six integrated circuit (IC) design companies, a chip packaging firm, a wafer foundry and a packaging material provider – have been approved this month, according to domestic stock exchange filings. These IPOs are expected to raise a total of 21.6 billion yuan (US$3 billion) from investors.

The wafer foundry now set to go public on the mainland is Semiconductor Manufacturing Electronics (Shaoxing) Corp, which is affiliated with the country’s largest and most advanced chip maker Semiconductor Manufacturing International Corp (SMIC). There were only seven chip-related IPOs approved in the same month last year.

The latest IPO approvals come hot on the heels of the go-ahead received earlier this month by Hong Kong-listed Hua Hong Semiconductor, China’s second-largest chip maker, for its US$2.5 billion listing on Shanghai’s Science and Technology Innovation Board, also known as the Star Market.