Cambricon, a maker of AI chips for smartphones and servers founded in 2016, received massive amounts of investment as a startup (see China chip startup nets $100 million Series A ), which gained it high-profile 'unicorn' status. Investors include a couple of government owned investors and Alibaba and Lenovo.
The company set the price for its 10-percent IPO at 64.39 yuan, valuing the company at about US$3.65 billion and to raise US$3.65 billion. However, the stock price surged to 295 yuan before settling back just above 200 yuan.
The Shangahi surge in share price followed a similar one enjoyed by Semiconductor Manufacturing International Corp. (SMIC) a few days before on July 16. SMIC's listing on the Shanghai STAR board jumped 246 percent on their first day of trading in China's biggest listing for a decade.
Bloomberg referred to "chipmaker mania" in China, but with government policy and support focused on semiconductor self-sufficiency it can be seen that many investors see chip companies as safe bets.
Cambricon used to be a supplier of AI chips to Huawei but was at least partly prompted to stage the IPO to make up for lost revenue when Huawei decided to take the AI work in-house.
Cambricon made a net loss of 1.18 billion yuan (about $168 million) in 2019, according to the IPO prospectus. This year the company expects to make a net loss of 482 million yuan (about US$69 million) followed by a net loss of 380 million yuan (about US$54 million) in 2021.
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