China’s second-largest chipmaker poised for $2.5 billion IPO in Shanghai

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SHANGHAI, Nov 7 (Reuters) - Chinese spot shaper Hua Hong Semiconductor Ltd has received regulatory support for an 18 cardinal yuan ($2.5 billion) IPO successful Shanghai, according to a filing published precocious connected Friday connected the Hong Kong banal exchange.

The planned archetypal nationalist offering (IPO) comes arsenic China’s spot companies cogwheel up for steeper contention with the United States owed to geopolitical tensions.

According to its prospectus, Hua Hong intends to usage the wealth to put successful a caller fabrication works - oregon fab - successful the eastbound metropolis of Wuxi, with operation acceptable to statesman successful 2023 and an eventual accumulation capableness of 83,000 wafers per month.

The institution presently has 4 fabs successful full - 3 8-inch fabs successful Shanghai, and 1 12-inch fab successful Wuxi presently expanding to 95,000 wafers per month. The proceeds from the IPO volition besides spell to upgrading the second fab, according to its prospectus.

Hua Hong’s Shanghai IPO volition travel that of China’s Semiconductor Manufacturing International Corp (SMIC), which, similar Hua Hong, went nationalist connected Shanghai’s tech-centric STAR marketplace successful 2020 aft it listed successful Hong Kong years earlier.

That IPO raised $6.6 cardinal yuan, making it the largest-ever connected the then-new committee and the largest successful China since 2010. SMIC’s IPO arrived conscionable arsenic tensions betwixt the United States and China were heightening implicit semiconductor technology.

Hua Hong’s planned IPO comes aft Washington passed unprecedented export controls connected Chinese spot makers. In particular, it barred U.S. based instrumentality makers from selling tools to Chinese foundries for accumulation of logic chips produced astatine 14-nanometers and below.

Hua Hong specializes successful mature technology, and generates astir of its gross making chips utilizing 55-nanometer process technology. The institution has a planetary marketplace stock of 3.2% of the foundry business, according to probe steadfast TrendForce. (Reporting by Josh Horwitz Editing by Mark Potter)

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