Shanghai: Chinese Smic predicts biggest IPO in a decade

by bold-lichterman

The main Chinese semiconductor maker, Smic, said on Monday it hoped to raise 6.7 billion euros during an upcoming IPO in Shanghai, which would be the biggest in a decade in China. The announcement caused the company’s shares to jump more than 20% in Hong Kong, where it is already listed.

Smic (Semiconductor Manufacturing International Corporation) said Monday in a statement to the Shanghai Stock Exchange that it hoped to raise up to 53.2 billion yuan (6.7 billion euros). This would constitute the biggest stock market IPO in mainland China (excluding Hong Kong) since that in 2010 in the Shanghai market of the Agricultural Bank of China – one of the country’s major public banks.

Chinese tech giants listed abroad

Several Chinese tech giants are listed abroad, such as Alibaba (e-commerce) and Baidu (search engine) on Wall Street. But against the backdrop of growing Sino-American rivalry, China wants to reverse this trend. In recent years, it has relaxed the listing rules in order to encourage its nuggets to stay in the country. The ruling Communist Party (CCP) hopes to make national champions world leaders in new technologies, particularly in artificial intelligence or big data.

Smic is the biggest chip maker in China. It is also one of the key companies in China’s ambition to one day achieve autonomy in semiconductors. Because Beijing seeks to break the country’s dependence on foreign chips, especially American ones. A reality highlighted by Washington’s campaign to hamper the development of Chinese private telecoms giant Huawei, in the name of national security and out of fear of potential spying by China.

The US Department of Commerce announced in May its ambition to prevent the company from buying foreign semiconductors. The company has denounced sanctions that threaten its “survival”.