Chinese BYD Semiconductor Withdraws IPO Plan: "Will Proceed After Increasing Capacity"

[Image source=AP Yonhap News]

[Asia Economy Beijing=Special Correspondent Kim Hyun-jung] BYD Semiconductor, a subsidiary of BYD, China's largest electric vehicle manufacturer, has officially withdrawn its initial public offering (IPO), according to the local economic media Caixin on the 16th.

According to the report, BYD Semiconductor announced that it made this decision after improving the production capacity of silicon wafers, a key material for semiconductors, and comprehensively considering the company's development status and future business strategy.

The company, which originally planned to spin off from BYD and list on the ChiNext board (創業板), a stock market dedicated to small and medium-sized venture enterprises on the Shenzhen Stock Exchange, explained that it would focus on investment and production to improve capacity and then reconsider the listing after reviewing conditions. The company stated, "We have been concentrating investments on expanding production capacity to increase wafer production capability," adding, "Although production capacity is steadily increasing, BYD faces continuous growth in the new energy vehicle industry, and it has judged that the existing capacity in Shandong is still far from meeting the related demand."

Furthermore, the company said, "The withdrawal of the listing plan will not have any adverse effects on the company's operational activities, financial situation, or future development strategy," and explained that it does not plan any large-scale asset restructuring within one month after this announcement.

According to the Hong Kong South China Morning Post, UBS forecasts that by 2030, three out of five new vehicles entering Chinese roads will be powered by battery packs. In fact, from January to September this year, the demand for automotive semiconductors in China surged significantly due to a 113% increase in new car sales.

BYD Semiconductor acquired a foundry in Shandong Province last year for 5 billion yuan (approximately 936.4 billion KRW) and completed the installation of 8-inch automatic grading chip foundry equipment in Changsha, Hunan Province, in September. Both projects appear to be aimed at producing more automotive chips domestically, which the Post interprets as a response to the Chinese government's and relevant authorities' call for "semiconductor self-sufficiency."

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