China's leading semiconductor manufacturer, SMIC (Semiconductor Manufacturing International Corporation), has applied for a 20 billion RMB IPO on the Shanghai Stock Exchange.

China's largest semiconductor manufacturer, Semiconductor Manufacturing International Corporation (SMIC), has officially applied for an initial public offering (IPO), aiming to raise 20 billion RMB. Following the U.S. Department of Commerce's announcement of chip restrictions on Chinese tech giant Huawei, SMIC can be seen as China's final hope in developing its semiconductor industry and reducing reliance on overseas chips.

Application for Listing on Shanghai Stock Exchange

According to a report, Semiconductor Manufacturing International Corporation (SMIC) has submitted an IPO application to the Shanghai Stock Exchange's STAR Market, planning to raise 20 billion RMB in this IPO by issuing 1.686 billion shares at a price of approximately 11.9 RMB per share. SMIC is considered China's last hope in developing the semiconductor manufacturing industry, especially amidst the escalating tensions between China and the United States, prompting China to accelerate its semiconductor manufacturing capabilities to reduce reliance on the US or other countries.

Amidst the US-China trade war, the US Department of Commerce imposed new restrictions on Chinese tech giant Huawei on May 15, requiring all chip manufacturers using US technology to apply for a license before shipping chips to Huawei. These restrictions not only significantly impact Huawei but also affect Taiwan's largest semiconductor manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC). It was reported that Huawei placed significant orders with TSMC before the restrictions took effect, but TSMC stopped accepting orders from Huawei. Subsequently, to strengthen its relationship with the US and the state of Arizona, TSMC announced on the same day as the ban that it would build an advanced semiconductor fab in the US.

Market analysts suggest that while SMIC aims to compete with TSMC, it lags significantly behind in technology. SMIC is still using 14-nanometer (nm) chips, while TSMC is expected to mass produce more advanced 5-nanometer chips this year.

Impact on Chinese Mining Industry

It is noteworthy that SMIC is also collaborating with mining hardware manufacturer Canaan to develop 14-nanometer chips. According to cryptocurrency mining expert Kristy-Leigh Minehan'sstatement, SMIC's technology would take several years to catch up to TSMC (the main chip supplier for Bitmain). However, she still anticipates that SMIC will become a domestic alternative to TSMC and Samsung, providing a large number of ASIC mining machines for "copycat coins".

"Will Bitmain or MicroBT start using SMIC's chips? Definitely not. Currently, 7-nanometer process chips dominate the market competition, and it will take SMIC several more years to catch up. However, as a major domestic alternative to TSMC, GlobalFoundries, and Samsung, SMIC will be able to provide a significant amount of ASICs for the copycat coin market."

Overall, she expects SMIC's IPO to be successful as China urgently needs a self-sufficient semiconductor manufacturer.