Integrated circuits on a circuit board. The semiconductor industry has been in focus during the trade war between the United States and China.
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SMIC, China’s largest chip maker, saw its shares rise 245% at the opening on its first day of trading in Shanghai.
The sale of shares is an important time for the company, but also for China’s broader ambition to grow its national semiconductor industry, a boost accelerated by the U.S.-China trade war.
SMIC issued 1,685,620,000 shares at 27.46 yuan per share, raising 46.28 billion yuan ($ 6.62 billion).
That was more than double its initial target, amid a sharp rise in the price of its Hong Kong-listed shares due to the excitement generated prior to the sale of Shanghai shares.
The sale of shares is the largest on the continent in a decade since the Hong Kong-Shanghai dual list of more than $ 22 billion from the Agricultural Bank of China in 2010, according to data from Dealogic.
The shares were trading at 95 yuan at the opening, an increase of 245%. SMIC is part of China’s so-called Scientific and Technological Innovation Board, or STAR Board, a push by the world’s second-largest economy to create a Nasdaq-style environment for publicly-listed technology companies. Shares debuting on the STAR Board are known for wild price movements on the first day of trading.
SMIC is seen as a key player in China’s ambition to boost its national chip industry. The company is known as a contract chipmaker, which means it manufactures semiconductors designed by other companies.
It is a direct rival to TSMC of Taiwan and Samsung Electronics of South Korea. But its technology lags far behind its rivals.
SMIC will likely use the money it has raised to invest in its technology to try to catch up with both companies.
Investors have shown a lot of interest in SMIC ahead of the Shanghai listing. Its Hong Kong-listed shares are up more than 200% this year. But those shares were about 6% lower in early trading on Tuesday.
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