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Chinese contract chip manufacturer backed by SMIC aims to raise US$1.4 billion o...

 1 year ago
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Chinese contract chip manufacturer backed by SMIC aims to raise US$1.4 billion on Shanghai's Star Market.

Chinese contract chip manufacturer backed by SMIC aims to raise US$1.4 billion on Shanghai's Star Market.

11 hours ago

In one of the world's largest IPOs so far this year, a contract chip manufacturer backed by China's leading foundry is aiming to raise US$1.4 billion.

According to a filing, Semiconductor Manufacturing Electronics Shaoxing (SMES) will list 1.69 billion shares at a price of 5.69 yuan each on Shanghai's Star Market, which is modeled after the Nasdaq. Subscriptions will open on Wednesday.

Refinitiv statistics showed that if the company raises 9.6 billion yuan (US$1.4 billion), it will be the second-largest IPO in Asia-Pacific this year, after only Nexchip Semiconductor's US$1.67 billion fundraising on the Star Market on April 18.

According to the filing, the business will have a market value of 38.5 billion yuan upon SMES' listing. The offering's underwriters are Haitong Securities, Huatai United Securities, and Industrial Securities.

Established in 2018 with a registered capital of 5.07 billion yuan, SMES is a joint venture between Semiconductor Manufacturing International Corporation (SMIC) and the Shaoxing government. Power semiconductors, sensors, analogue chip packing, and sensor manufacturing are the company's areas of expertise.

The IPO prospectus reveals that the chip producer has experienced losses above 1 billion yuan for three consecutive years, despite the fact that SMES' operational income nearly doubled to 4.6-billion-yuan year on year in 2022.

The IPO takes place at a time when the Chinese government has been stepping its support for the semiconductor industry amid an escalating tech battle with the US, including easier access to the local capital market.

To support domestic manufacturers, China also issued policies including subsidies and tax cuts for chip companies, as well as set up semiconductor funds to help develop designated areas into a major new outpost for its semiconductor industry.

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