Chip design firm Socionext Inc yesterday jumped 15 percent in its Tokyo debut after completing Japan’s largest initial public offering (IPO) this year, defying recent investor pessimism about global semiconductor shares.
Shares of the Yokohama-based company, which had Panasonic Holdings Corp, Fujitsu Ltd and the Development Bank of Japan Inc as holders prior to the listing, ended the first session at ￥4,200.
They were sold at ￥3,650, the top of the marketed range in an IPO that was upsized to ￥66.8 billion (US$456.78 million) due to high investor interest.
Semiconductor listings in Tokyo tend to perform well in their first session, Bloomberg data showed.
Socionext managed to attract buyers even in a weak market for IPOs in Japan, where proceeds slumped 80 percent this year on an annual comparison.
The jump contrasts to a chip-related stocks rout that has wiped out more than US$240 billion from the sector’s global market value this week after the US imposed curbs on China’s access to technology.
Socionext develops customized systems-on-chips (SoC) for clients across the consumer, automotive and industrial fields. Apple Inc’s Silicon processors and Qualcomm Inc’s Snapdragon line are mass-market examples of such logic processors, often referred to as the brains of electronic devices.
Enterprise customers increasingly seek bespoke, application-specific chips and Socionext competes with Taiwan’s Faraday Technology Corp (智原科技), Alchip Technologies Ltd (世芯電子) and Global Unichip Corp (創意電子) to fill that demand.
The company was founded in 2015 from the combination of the SoC divisions of Fujitsu Semiconductor Ltd and Panasonic.
It is the fourth semiconductor company to go public in Japan in the past two years, and the biggest among the country’s nine semiconductor listings in the past decade, the data showed. Just one of them, RS Technologies Co, did not end the first session above the IPO price.
Looking at the broader market, companies that debuted in Tokyo over the past two years after raising more than US$100 million rose by a 28 percent average on the first day, Bloomberg data showed.
Demand for Socionext’s IPO “seems to have been strong with long-only funds taking up the deal,” said Clarence Chu, an analyst at Aequitas Research who publishes on Smartkarma.
The company is among global chip players attempting to expand in the fast-growing automotive tech industry, with sales to the segment “continually” rising, and had its shares priced “at a more attractive valuation” than peers listed in Japan, the US and Taiwan, he said.
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