Hua Hong Semiconductor Ltd, China’s second-largest chipmaker, has received approval from the Shanghai Stock Exchange for a planned $2.6 billion public share sale as Beijing rushes to counter US chip sanctions.
The listing, which still requires a green light from China’s securities watchdog, would be the mainland’s biggest this year.
Hua Hong’s Hong Kong-listed shares shot up 10.7% on Thursday after it announced late on Wednesday its application had been approved by the bourse’s listing committee.
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The Shanghai-based chipmaker saw its revenue jump 52% in 2022 to a record $2.5 billion. It applied for a dual listing on Shanghai’s tech-focused STAR Market in November.
The fundraising would “fuel a new round of capacity expansion” by Hua Hong, Guosen Securities said in a report.
The chipmaker has said it will increase capacity at its 12-inch production line in China’s Wuxi city this year and will start to build new lines.
Chipmakers in fundraising rush
Hua Hong’s share listing would dwarf the $1.67 billion initial public offering (IPO) by another chipmaker, Nexchip Semiconductor Corp, this year.
The listings come amid a capital raising rush by Chinese chipmakers as Beijing seeks self-sufficiency in an escalating technology war with Washington.
Sweeping semiconductor-related export restrictions imposed by the United States have made it harder for Chinese chipmakers like Hua Hong and Semiconductor Manufacturing International Corp (SMIC) to catch up with overseas rivals such as Taiwan Semiconductor Manufacturing Co (TSMC).
With an aim to counter those sanctions, Beijing has been guiding capital into a sector crucial in its competition with the US.
More than a dozen Chinese chipmakers, including Lontium Semiconductor Corp and Skyverse Technology, have sold shares publicly on the mainland this year.
Chinese investors have also ploughed money into chipmaking stocks.
An index tracking the domestic sector has jumped 17% since January 1, far outperforming the benchmark CSI300 Index, which gained less than 3%.
- Reuters, with additional editing by Vishakha Saxena
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