China Semiconductor SMIC Shanghai IPO... Response to US Huawei Sanctions

[Asia Economy Beijing=Special Correspondent Park Sun-mi] SMIC, China's largest semiconductor foundry company, is raising 20 billion yuan through a listing on the Shanghai Stock Exchange. This is aimed at large-scale investment and research and development (R&D) for semiconductor self-sufficiency.

According to Global Times on the 3rd, SMIC announced plans to raise about 20 billion yuan (approximately 3.4 trillion KRW) through its Shanghai Stock Exchange listing. Part of the funds raised through the initial public offering (IPO) will be invested in the 'SN1 Project,' a 12-inch wafer production project. Additionally, some will be invested in R&D for 14-nanometer FinFET manufacturing technology and 7-nanometer chips. SMIC has previously received $2.2 billion in investment from Chinese government agencies to invest in building advanced production facilities to reduce the technology gap.

Industry experts predict that SMIC's investment will elevate semiconductor manufacturing capabilities closer to 7-nanometer production, and within three years, SMIC's production capacity will reach a level capable of producing 3-nanometer and 5-nanometer wafers.

Global Times explained that SMIC's listing and the various investments and research funded by the raised capital could help SMIC replace the role of Taiwanese foundry company TSMC. The disclosure of SMIC's large-scale investment attraction and IPO plans came after the U.S. imposed regulations restricting semiconductor supply to Chinese companies including Huawei, aiming to narrow the technology gap with TSMC.

Currently, TSMC serves as a major semiconductor supplier to Huawei but is under pressure to cut ties with Huawei as it pursues large-scale factory construction in the U.S.

An anonymous source told Global Times, "In preparation for the U.S. cutting chip supplies to Huawei, China is making every effort to nurture a company that can replace TSMC."

This content was produced with the assistance of AI translation services.