Top chip firm planning STAR Market listing

Semiconductor Manufacturing International Corp (SMIC), the top chip firm on the Chinese mainland, plans to list on Shanghai's STAR Market. It will raise capital through the listing for its new 12-inch wafer plant in Shanghai, the Hong Kong-listed firm said in a statement.

Shanghai-based SMIC plans to issue about 1.69 billion shares. About 40 percent of the capital raised will be used for a new 12-inch wafer plant in Shanghai, it said in a statement to the Hong Kong Stock Exchange. 

SMIC owns and operates several 8-inch and 12-inch wafer plants in Shanghai, Beijing, Tianjin and Shenzhen. It helps clients, including Huawei, make chips for use in smartphones, electronics, cars and other devices.

The Shanghai plant, codenamed SN1, will feature advanced fabrication technology up to 14 nanometers, the company said.

The new plant, which broke ground in 2016, cost over US$10 billion and will boost the integrated circuit industry output by over 100 billion yuan (US$14.3 billion) in future, according to earlier media reports. 

SMIC’s development is expected to offer opportunities for all players in the domestic semiconductor industry, covering semiconductor equipment, materials, design and assembling and test firms, said He Lizhong, an analyst at Guosen Securities.

SMIC surged 10.75 percent to close at HK$16.90 (US$2.41), compared with the Hang Seng Index closing 1.13 percent up on Wednesday.

STAR-listed AMEC, one of the country’s top semiconductor equipment vendors with clients including SMIC, jumped 13.59 percent to close at 190.90 yuan. STAR-listed National Silicon Industry Group Co, which produces large-sized silicon wafers, surged by the 20 percent daily cap to close at 19.01 yuan. 

Shanghai-listed JCET Group, the Chinese mainland’s biggest chip assembly and test firm, jumped 8.1 percent to close at 27.23 yuan, compared with the 0.63 percent rise in the Shanghai stock index.

The United States’ technology blocking and ban on the semiconductor industry has forced China to develop its own ecosystem, bringing opportunities to firms such as SMIC and AMEC, analysts said.

The STAR Market is home to over 100 firms and is considered a major step toward deepened reform in China's A-share market. It has also become an attractive platform for high-profile Chinese tech companies seeking to get listed at home.

STAR Market innovations allow dual-share structures, spin-offs among listed firms and a wider daily price change range to 20 percent.