Taipei-based financial management company Oak Stone Limited has reported that Semiconductor Manufacturing International Corp. soared over 200% during its Shanghai debut after a stock offering that is set to be China’s biggest in a decade.
On its first day of trading in the Shanghai Stock Exchange’s STAR market, the Shanghai-based chipmaker rose to 82.92 yuan after initially selling shares at 27.46 yuan each.
If it chooses to fully exercise a greenshoe option, SMIC will raise as much as 53.2 billion yuan ($7.6 billion), making it the biggest mainland stock sale since the 68.5 billion yuan IPO of Agricultural Bank of China Ltd. back in 2010,” reported Michael Pearson, Head of Corporate Equities at Oak Stone Limited.
The mainland listing of SMIC arrives while competition between the U.S. and China for global tech dominance intensifies. As the country’s No.1 contract maker of chipsets, SMIC plays a significant role in Beijing’s plans to become self-sufficient in semiconductor manufacturing following attempts by the Trump administration to curb the access of Chinese companies to key components.
Proceeds from the share sale will be used to produce next-generation chipmaking technologies as SMIC aims to catch up with competitors like Taiwan Semiconductor Manufacturing Co., which makes chips for the most advanced smartphone models of Apple Inc. and Huawei Technologies Co. TSMC, the biggest contract chipmaker in the world, is poised to launch 5-nanometer technology, two generations in front of SMIC’s capabilities.
“On Thursday, SMIC’s shares in Hong Kong dropped 22%, the biggest decline since its 2004 listing. Those shares had tripled this year in anticipation of the Shanghai IPO,” reported James Burnley, Head of Wealth Management at Oak Stone Limited.
China Integrated Circuit Industry Investment Fund, the Abu Dhabi Investment Authority and Singapore’s sovereign fund GIC Pte are among the institutional investors involved in SMIC’s share offering.