SMIC raises $7.57 billion on Shanghai Stock Exchange debut

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SMIC requests trade licensee to resume selling semiconductors to Huawei
Image: SMIC

Semiconductor Manufacturing International Corporation (SMIC) raised ¥53 billion ($7.57 billion) on Wednesday via its initial public offering (IPO) on the Shanghai Stock Exchange. The firm priced at shares at ¥27.46 ($3.92), but a 246 percent surge pushed their value to ¥95 ($13.57).

The chipmaker’s IPO significantly exceeded its expectations as it intended to raise ¥20 billion ($2.8 billion) with its stock sale.

Details on SMIC’s Massive Chinese IPO

Since 2015, Beijing has made it a priority for China to achieve semiconductor independence. In pursuit of that goal, the nation has heavily invested in regional microelectronics firms. The Sino government played a big role in SMIC’s IPO success for that reason.

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The China Integrated Circuit Industry Investment Fund poured ¥3.5 billion ($500 million) in the brand during its latest fundraising effort. Local regulators also approved SMIC’s initial offering in just 19 days, a process that normally takes months.

SMIC is a rising star of the domestic industry, developing processes that have won the business of Qualcomm and Huawei. Currently the largest Sino-based contract chipmaker, the firm earned $3.11 billion in revenue last year.

SMIC’s Push for Technological Advancement

Despite its success, SMIC still trails rivals Samsung and the Taiwanese Semiconductor Manufacturing Company (TSMC) in technological sophistication. At present, the firm is not capable of fabricating 7nm wafers, though its N+1 process is very close. As a result, the company cannot mass-produce the chipsets that power best-selling mobile devices like the iPhone 11.

The corporation has sought to enhance its production methodologies by reportedly purchasing an extreme ultraviolet lithography (EUV) machine from ASML. Because EUV tech allows chipmakers to render incredibly dense silicon, ASML’s equipment is the gold standard in cutting-edge microprocessor equipment. However, Reuters notes Washington intervened and has kept SMIC from modernizing its manufacturing capability.

Nevertheless, SMIC is dedicated to establishing a next-generation CPU fabrication process. The company launched its Chinese IPO to raise the capital necessary to upgrade its tech. The firm also recently partnered with Shanghai Microelectronics to gain access to the tools it needs to move forward. With its new resources, the manufacturer should be able to mass-produce the high-end chipsets Huawei needs for its flagship smartphones.

With SMIC nearing parity with its rivals, consumers will benefit from tech breakthroughs that invariably arise from intense competition.

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