China’s Largest contract chipmaker, Semiconductor Manufacturing International Corporation (SMIC), filed an application for listing in Shanghai in which the company intends to attract 20 billion yuan ($2.8 billion).
SMIC is committed to increase investment in their technology in the face of escalating trade tensions between the US and China, which SMIC may be forced to significantly increase production.
the Stock SMIC is already placed in Hong Kong, but the company is looking to raise more funds. Last month the contractor has received from the state investment of $2.2 billion.
the Company is part of a wider China’s commitment to sustainability, when it comes to semiconductors, a field in which the world’s second largest economy is far behind the United States. But China’s efforts have received greater impetus, as Washington continues its technology war with Beijing.
Huawei was a Chinese company, which was imposed US sanctions. Last year she was included in American blacklist, which has limited its access to American technology. In may, the administration trump introduced the rule that foreign manufacturers using U.S. equipment on the Chipmunk, must obtain a license before they can sell Huawei semiconductors.
Huawei is developing a chip itself, but produces them from other companies. Informed manufacturing partner TSMC was Taiwan. By the end of 2019 on orders Huawei accounted for 14% of all released its chips, which made Huawei one of the major customers of TSMC.
If Huawei is not able to obtain semiconductors from TSMC, it may have to seek alternative options such as SMIC. But experts in comments to CNBC said that the technology SMIC lags behind TSMC. Therefore, the recent cash infusion can become the impetus for the company kait seeks to quickly expand its capabilities.
the New export rules mean that even non-U.S. chip manufacturers that use American technology of making chips will need to apply for a license before sending chips to Huawei or its 114 subsidiaries, including the company by designing chip HiSilicon.
SMIC said the new export regulations of the United States pose a potential risk to the business, as this will reduce the production and sales.
This step again puts Huawei into the center of the U.S. plan for preventing technological dominance of China, as the administration trump and lawmakers expressed concern that America’s dependence on China in critical technology can jeopardize the country’s national security.
Beijing is pouring vast amounts of capital and expands tax incentives to support domestic companies for the production of chips, as the industry faces the growing prospect of being strangled by the US government.
“Market Star Market now plays its role as a strategic platform to raise funds to support their own technology companies in the country as the deterioration in us-China relations,” — says Zhou Lin, a Fund Manager Shanghai company Shiva Investment.
Based on the amount 1,686 billion shares, which SMIC intends to offer, it is expected that the company will offer shares at a price of about 11.9 yuan apiece, which is approximately 30% discount to the so-called X-shares (shares of the company from mainland China listed on the Hong Kong or foreign stock exchange). The shares rose 1.5% to 18.46 Hong Kong dollar ($2,38) on Tuesday morning.
Investment received in may from public investors, SMIC plans to use to Finance the construction of a factory in Shanghai. The capacity of the plant for the production of 6 thousand 14-nanometer chips in mesac will be increased to 35 thousand, according to SMIC.