State backing helps SMIC stage $6.5 billion fund raiser

July 06, 2020 //By Peter Clarke
State backing helps SMIC stage $6.5 billion fund raiser
Semiconductor Manufacturing International Corp. (SMIC) has announced the price at which it plans to issue about 1.69 billion shares in the company as it lists on the Shanghai stock exchange.

This will raise US$6.55 billion – or $7.5 billion if an over-allotment option is exercised – and will provide useful funds for SMIC's expansion as China seeks to achieve self-sufficiency in lead-edge digital IC manufacturing. The move is timely because the US has effectively cut China off from access to leading-edge manufacturing services from TSMC (Hsinchu, Taiwan) in recent months (see US tightens restrictions on Huawei's chip supply ).

The share price has been set at 27.46 yuan and allows SMIC to expect 49.298 billion yuan (about US$6.55 billion) which would be one of the largest Chinese IPO's in a decade. The company has granted an over-allotment option of up to 15 percent of the issue which could take the funds raised to $7.5 billion.

This is more than twice what SMIC expected to raise when it first announced its intention to join the Science and Technology board of the HKSE, based in Shanghai.

The success of the listing was more or less guaranteed by the state administered China Information and Communications Technologies Group (CICT) offering to buy 2 billion yuan  worth of shares and the Shanghai IC Fund offering to take 500 million yuan worth of shares. In line with these figures CICT has been allocated 72.47 million shares and Shanghai IC Fund 18.21 million shares.

SMIC said the listing would take place as soon as possible.

Related links and articles:

www.smics.com

News articles:

SMIC looks to raise $3 billion in Shanghai

Foundry SMIC working flat out, raises capex

LFoundry quietly sold to startup Wuxi Xichanweixin

US tightens restrictions on Huawei's chip supply


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