SMIC to raise 20b yuan with STAR listing

Semiconductor Manufacturing International Corp (SMIC), the biggest chipmaker on the Chinese mainland, plans to raise 20 billion yuan (US$2.86 billion) through a listing on the Shanghai Stock Exchange STAR Market, the company said on Tuesday.

Proceeds will be focused on developing 14-nanometer chip manufacturing, the mainland’s most advanced technology. The SMIC listing and development are expected to boost the domestic semiconductor industry at a time when the US strengthened tech export control toward China.

SMIC, now listed in Hong Kong, announced its initial pubic offering on the STAR Market, according to its statement to the Hong Kong Stock Exchange.

Shanghai-based SMIC is expanding capacity in its latest 12-inch wafer plant in the city. Through the coming IPO and other fundraising, the plant’s registered capital will jump from US$3.5 billion to US$6.5 billion, SMIC said previously.

SMIC makes chips for clients such as Huawei and other smart device makers. The chips are widely used in smartphones, TVs, cameras, home appliances, industrial devices and in the automotive industry.

China is the world’s largest importer of chips and need companies like SMIC to develop and produce more of them. 

In the first four months, China imported 160.5 billion integrated circuit units, a 31.1 percent growth year on year.

SMIC jumped 2.86 percent to close at HK$18.7 (US$2.4) on Tuesday, compared with the 1.11 percent increase in the Hang Seng Index in Hong Kong. SMIC has already surged 56.6 percent this year.

With 14-nanometer technology, SMIC is narrowing the technology gap between firms such as TSMC and Intel, which have adopted 7nm and 5nm technologies.