Semiconductor Manufacturing International Corp (中芯國際集成電路), China's first chipmaker to sell shares, said it needs to raise more capital in the next two years, retracting an official's earlier comment that it had sufficient finances.
At a March 7 press conference the official said proceeds from the overseas share sale, cash and borrowings under the company's existing banking facilities should be "sufficient" to meet its capital expenditures through 2005. That contradicted the company's prospectus filed with US regulators that said it will need more funding in the future.
Semiconductor Manufacturing, which raised HK$14 billion (US$1.8 billion), the maximum sought from its Hong Kong initial public offer, said the official made "inaccurate statements," according to a notice published in the South China Morning Post.
The company "believes it will be required to pursue additional external financing, either in the form of additional borrowings or the sale of equity or equity-linked securities, in order to fund its planned capital expenditures and working capital," it said in the notice.
Semiconductor Manufacturing, which priced its Hong Kong shares at HK$2.72 each, also sold American depositary receipts in the US, pricing them at US$17.50 each. The shares will start trading in New York on March 17 and in Hong Kong the next day.
The Shanghai-based company also retracted the official's comments made at the same press conference that it had filed a motion to dismiss a copyright complaint made by rival Taiwan Semiconductor Manufacturing Co (台積電) and its affiliates.
Semiconductor Manufacturing said its legal advisors are still in the process of reviewing the claims contained in the complaint and "have therefore not formed a definitive view on the merits of those claims."
China's semiconductor demand will jump 41 percent this year, driven by chips used in mobile phones, computers, DVD players and other electronics, an industry group forecast.
Demand will rise to US$27 billion this year, from US$19.2 billion in 2002, and more than double again to reach US$61.9 billion by 2008, Semiconductor Equipment and Materials International said in a press release issued at a press conference in Shanghai yesterday.
"There's a widening gap between indigenous demand and domestic production, which means huge opportunity for companies all over the world," said Stanley Myers, chief executive of the association.
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