Semiconductor Manufacturing International Corp (SMIC, 中芯國際) yesterday surged more than 200 percent during its Shanghai debut following a stock offering that is set to be China’s largest in a decade.
The Shanghai-based chipmaker climbed to 82.92 yuan on its first day of trading on the Shanghai Stock Exchange’s STAR market after initially selling shares at 27.46 yuan apiece.
SMIC could raise as much as 53.2 billion yuan (US$7.6 billion) if it fully exercises a greenshoe option, which would make it the largest mainland Chinese stock sale since Agricultural Bank of China Ltd’s (中國農業銀行) 68.5 billion yuan Shanghai initial public offering in 2010.
SMIC’s mainland listing comes amid intensifying competition between the US and China for global tech supremacy.
As the nation’s No. 1 contract manufacturer of chipsets, SMIC plays an important role in Beijing’s ambitions of becoming self-sufficient in semiconductor production following efforts by US President Donald Trump’s administration to curtail access by Chinese companies to key components.
Proceeds from the share sale would be used to develop next-generation technologies as SMIC seeks to catch up with rivals like Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which makes chips for Apple Inc and Huawei Technologies Co (華為).
TSMC, the world’s largest contract chipmaker, is ready to commercialize 5-nanometer technology, two generations ahead of SMIC’s capabilities.
China Integrated Circuit Industry Investment Fund, Singapore’s sovereign fund GIC Pte and the Abu Dhabi Investment Authority are among institutional investors that participated in SMIC’s share offering.
SMIC’s shares in Hong Kong fell 22 percent yesterday, the biggest drop since its listing in 2004. Those shares had tripled this year in anticipation of the Shanghai listing.
“SMIC has surged multiple times over a short period of time,” Everbright Sun Hung Kai Co (光大新鴻基) strategist Kenny Wen (溫傑) said by telephone. “We see investors rush to profit-taking once the listing is completed.”
Chinese shares yesterday slumped by the most in more than five months as a bull run that had pushed the country’s benchmark indices to multiyear highs reversed sharply amid renewed Sino-US tensions.
The Shanghai Composite index closed down 4.5 percent at 3,210.10, while the blue-chip CSI300 index slid 4.81 percent, the sharpest one-day percentage fall for both indices since Feb. 2.
Additional reporting by Reuters
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