Beijing: China's sanctions-hit semiconductor industry is set to receive a much-needed lifeline through new public listings and capital raised from mutual funds, according to the most recent stock market filings and financing data from Beijing. According to Key Chip accelerates the self-reliance campaign. Faced with tough US trade sanctions.
China's semiconductor supply chain includes nine entities, including six IC design companies, a chip packaging company, a wafer foundry and a packaging materials supplier, according to domestic stock exchange filings.
has approved its initial public offering (IPO) applications this month. Investors are expected to contribute a total of 21.6 billion yuan (about $3 billion) to these IPOs.
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Semiconductor Manufacturing Electronics (Shaoxing) Corp., a subsidiary of Semiconductor Manufacturing International Corp., the country's largest and most technologically advanced chip maker, wafer foundry is soon to go public on the mainland (SMIC). A year ago, only seven chip-related IPOs were approved in a single month.
The recent IPO approval of Hua Hong Semiconductor, the second largest chipmaker in China and a company listed in Hong Kong, follows closely after it received approval for a US$2.5 billion listing on Shanghai's Science and Technology Innovation Board earlier this month. Is. It is also known as Star Market.
In terms of deal size, these IPO activities have been consistent over the past few quarters, according to Gary Ng, senior economist for Asia-Pacific at French investment bank Natixis. "More IPOs will make it easier for Chinese chip makers to access capital and devote more resources to R&D."
Ng said industry research and development "will be a difficult and lengthy process, but important to counter US sanctions." According to Chinese corporate data service Qichacha, 46 semiconductor companies involved in design, manufacturing, components and materials went public on the star market in the first eleven months of this year, compared with 19 during the same period last year.
Chinese fund management companies, which have launched several semiconductor-related funds to direct retail investors' money into chip stocks, are also raising more money.
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A new fund that is benchmarked on the mainland's chip stock index was launched last week by ICBC Credit Suisse Asset Management, a joint venture between state-owned Industrial and Commercial Bank of China and 166-year-old Swiss investment bank Credit Suisse. is a joint venture.
A joint venture, ICBC is the world's largest commercial lender by assets. All of these new investment flows come amid recent US trade sanctions on China's semiconductor industry and part of the country's chip supply chain representing an opportunity for companies to adapt to increased scrutiny by Washington.
On October 7, updates were implemented by the Bureau of Industry and Security (BIS), a division of the US Department of Commerce, that further limit China's access to supercomputers, advanced semiconductors and advanced computing chips used in military applications, including production. Huh. Is. of weapons of mass destruction.
Washington also added 31 Chinese tech companies, research institutes and related entities to the US's unverified list. This list, which acts as a trade embargo because persons involved are ineligible to receive goods under US government export administration regulations, is maintained by BIS and includes parties deemed by BIS to be in good faith. recognized in the faith.
Advanced Micro Devices and Nvidia were barred from selling their cutting-edge chips to customers in China following a directive from Washington in September. The Chips and Science Act was passed in August by the Biden administration to increase US IC production capacity.
Since the US chip ban, "patriotism" and potential government support have driven China's onshore secondary capital market for semiconductor firms rather than the short-term cyclical tech cycle," said Netixis economist Ng, who is dual-listed and a Hong Kong saw a 0.9% decline since early October, but Shanghai gained 8%.
For example as of November 24, the nation's top 50 semiconductor companies, as represented by StarMarket's Chip Index, are down 27% year to date.
Due to US trade sanctions, most of China's recently public semiconductor companies are engaged in established IC technologies.
For example, Shanghai-based New Vision Microelectronics Company makes sensor and display chips at 110 nanometers. The 65nm and 55nm process nodes are used in the production of the flash memory chip design manufactured by Shenzhen-based XTX Technology.
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These chip companies that are up for listing are frequently also interested in the domestic market. Xiaomi Corp. and the world's largest maker of personal computers, Lenovo Group, are clients of Shanghai Southchip Semiconductor Technology Co., whose founding members are from US IC manufacturer Texas Instruments.