SMIC debuts on China STAR market

Marco Green
July 16, 2020

SMIC, China's biggest chipmaker, saw its shares surge 245% at the open on its first day of trade in Shanghai.

But there were more clamoring to get in when trading started, which resulted in the trading opening at 95 yuan (~$14) compared to the offer price of 27.46 yuan (~$4). The stock rose 2.2 per cent in Hong Kong on Thursday. United Microelectronics' market cap is 195.55 billion New Taiwan dollars ($6.64 billion). That would make it the largest mainland stock sale since Agricultural Bank of China's 68.5 billion yuan Shanghai initial public offering in 2010. As the country's No 1 contract manufacturer of chipsets, SMIC plays an important role in Beijing's ambitions of becoming self-sufficient in semiconductor production following efforts by the Trump administration to curtail access by Chinese companies to key components.

Investors have been showing a lot of interest in SMIC ahead of the Shanghai listing. The company's listing has also attracted a wide range of retail investors such as Zhou Ziqing.

SMIC's offering underscores how keen China's top policy makers are to convince domestic tech titans to list locally. The semiconductor industry has been in focus during the U.S. SMIC Is part of China's so-called Science and Technology Innovation Board, or STAR Board, a push by the world's second-largest economy to create a Nasdaq-style environment for publicly-listed tech firms. More than 100 Chinese companies are listed in the US, including Beijing-backed China Mobile, the country's largest carrier, and e-commerce giant Alibaba Group Holding.

SMIC was previously listed on the New York Stock Exchange, but trading in its shares was low, and it delisted past year amid the escalating U.S.

SMIC is now trading on the Stock Exchange of Hong Kong (HKEX).

Other reports by Click Lancashire

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