Hong Kong-listed SMIC plans to raise about 20 billion yuan ($2.8 billion) through its secondary listing in Shanghai, the company said in a prospectus on Monday. The announcement came on the heels of the US' intensified crackdown on Huawei by restricting its sourcing of chips with US technology.
The IPO proceeds will be used for its 12-inch chip project, supplementing its cash flow as well as providing reserve capital for other advanced R&D projects, the foundry company said. The IPO prospectus revealed that SMIC has started R&D on its second-generation 14-nm FinFET manufacturing technology.
"Once the project is completed, SMIC's manufacturing level could inch closer to 7-nm scale," Ma Jihua, a veteran industry analyst, told the Global Times on Tuesday. With the capital injection, SMIC could march into the production of 7-nm and even 5-nm wafers in the coming three years, Ma said.
The key takeaways from SMIC's IPO prospectus are first, that it will invest 8 billion yuan in its 12-inch SN1 chip, which industry insiders believe will elevate its chip manufacturing ability to a more advanced level, smaller than 14-nm.
And, there will be rising investment from other state players, which shows that the "national team" is deploying the resources on hand to fully support the chipmaker's technological breakthrough amid a relentless US crackdown.
SMIC made a splash last year by delisting from the New York Stock Exchange at a time when the US government tightened crackdowns on Chinese tech companies.
In May, SMIC secured $2.2 billion investment from Chinese state-run investors.
