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Hua Hong plans to raise US$3 billion via Shanghai listing

Hua Hong plans to raise US$3 billion via Shanghai listing

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By Peter Clarke



China’s second largest foundry Hua Hong Semiconductor Co. Ltd. has said it plans to raise 21.2 billion yuan (about US$2.95 billion) through a secondary IPO in Shanghai.

The foundry aims to sell 407.75 million shares at 52.00 yuan each, the company said in an exchange filing on Sunday. The foundry’s IPO is expected to be the biggest listing in China this year.

The company is already listed on the Hong Kong Stock Exchange.

The second phase of China’s “Big Fund” – China Integrated Circuit Industry Investment Fund – has included China’s chip companies considered more successful; such as ChangXin Memory Technologies Inc. (CXMT), YMTC and SMIC. The fund has recently invested yet more capital into YMTC, which is struggling under the double blow of falling memory component prices and US sanctions limiting access to semiconductor manufacturing equipment (see YMTC gets $7 billion cash injection).

However, unlike some of the other companies on the Big Fund list Hua Hong has enjoyed healthy sales growth recently. Hua Hong made a net profit of US$406 million on sales of US$2,475 million in 2022 that were up 51.8 percent on the previous year.

Hua Hong, wants additional money to spend on its Wuxi 300mm wafer fab. It wants to increase specialty-node production in Wuxi to 83,000 wafers per month, focusing on automotive-grade chips, according to reports. Wuxi currently produces 65,000 wafers per month on 90nm and 65/55nm nodes.

Expansion of the Wuxi 300mm fab began in June and is due to complete by 4Q24 reports said. Hua Hong operates three 200mm wafer fabs in addition to its 300mm fab in Wuxi.

Related links and articles:

www.huahongrace.com

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