Already listed in Hong Kong, Hua Hong Semiconductor announced on March 21 that it was working on a secondary listing on the Shanghai Stock Exchange to finance its expansion plan. The second largest semiconductor company in the Middle Kingdom wants to take advantage of the country’s race for self-sufficiency.
Beijing hand in hand with Hua Hong
Hua Hong is expected to go public on the Shanghai STAR Market. From its French name Council for Scientific and Technological Innovation, it was created in 2019 for companies… Tech. The amount of the fundraising has not been disclosed, but according to the Hong Kong press it should reach 2 billion dollars.
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The company born in 1996 recorded a flattering turnover in 2021, of 1.63 billion dollars, up 70%. Its annual profit set a record, reaching $182 million. What titillate the Semiconductor Manufacturing International Corporation (SMIC) and its 1.7 billion dollars in turnover.
Hua Hong, like SMIC, is taking full advantage of Beijing’s proactive policy to increase its native production of semiconductors: tax relief, easier access to national capital.
China wants to break free from its dependence on foreign chips. In 2021, the country imported the equivalent of $432.6 billion in semiconductors, more than oil.
This intrinsic fragility, the technological tension with the United States and more recently, the global shortage of chips, have prompted the Chinese government to support its semiconductor sector. the South China Morning Post reports that according to the customs administration, imports in January and February 2022 fell by 4.6% compared to the previous year.
The nm race is lost in China. For now.
These interesting figures do not hide the limits of the Chinese policy illustrated by SMIC and Hua Hong. The latter manufactures 28-nanometer chips and hopes to improve its technological know-how to reach 14nm. A dimension already produced on a large scale by SMIC.
The main rivals of the two Chinese companies, the Taiwanese TSMC, the Korean Samsung, the American Intel already engrave chips of less than 10nm. TSMC, the sector leader, has started production of 5nm chips and IBM is said to have even developed the first 2nm chip… Technological performances that China and its companies are still far from achieving. For now.