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.
AI SPLURGE: The four major US tech companies have lost more than US$950 billion in value since releasing earnings and outlooks, while equipment makers were gaining Four of the biggest US technology companies together have forecast capital expenditures that would reach about US$650 billion this year — a flood of cash earmarked for new data centers and all the gear within them. The spending planned by Alphabet Inc, Amazon.com Inc, Meta Platforms Inc and Microsoft Corp, all in pursuit of dominance in the still-nascent market for artificial intelligence (AI) tools, is a boom without a parallel this century. Each of the companies’ estimates for this year is expected either near or surpass their budgets for the past three years combined. They would set a high-watermark for capital spending
China’s top chipmaker has warned that breakaway spending on artificial intelligence (AI) chips is bringing forward years of future demand, raising the risk that some data centers could sit idle. “Companies would love to build 10 years’ worth of data center capacity within one or two years,” Semiconductor Manufacturing International Corp (SMIC, 中芯) cochief executive officer Zhao Haijun (趙海軍) said yesterday on a call with analysts. “As for what exactly these data centers will do, that hasn’t been fully thought through.” Moody’s Ratings projects that AI-related infrastructure investment would exceed US$3 trillion over the next five years, as developers pour eye-watering sums
Bank of America Corp nearly doubled its forecast for the nation’s economic growth this year, adding to a slew of upgrades even after a rip-roaring last year propelled by demand for artificial intelligence (AI). The firm lifted its projection to 8 percent from 4.5 percent on “relentless global demand” for the hardware that Taiwanese companies make, according to a note dated yesterday by analysts including Xiaoqing Pi (皮曉青). Taiwan’s GDP expanded 8.63 percent last year, the fastest pace since 2010. The increase “reflects our sustained optimism over Taiwan’s technology driven expansion and is reinforced by several recent developments,” including a more stable currency,
COLLABORATION: Taiwan and the US could jointly find solutions to weaknesses in supply chain resilience for critical materials, focusing on mining and initial refinement Taiwan is likely to purchase rare earths from the US in the future, and is also in talks with Australia and Canada to strengthen global rare earth supply chain security, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. Taiwan and the US last month concluded the sixth Economic Prosperity Partnership Dialogue, during which both sides signed a joint statement endorsing the principles of the Pax Silica Declaration, pledging to deepen cooperation in areas including critical minerals. At the time, Kung said the two sides would establish working groups to advance cooperation in areas including artificial intelligence, digital infrastructure, critical materials and
RSS