Shanghai-based Hua Hong Semiconductor has revealed its plan to raise CNY21.20 billion (US$2.95 billion) through an initial public offering on Shanghai's STAR board. The foundry aims to sell 407.75 million shares at CNY52.00 each, said the company in an exchange filing on Sunday. The foundry's IPO is expected to be the biggest listing in China this year.
Back in November 2022, Hua Hong already applied for a listing on Shanghai's tech-focused STAR Market. In May, the company revealed that its application had been approved by the bourse's listing committee. In June, it was revealed that the second phase of China semiconductor policy fund - known as the "Big Fund" - would participate in Hua Hong's share issue as a strategic investor by subscribing for shares worth CNY3 billion. Today's announcement indicates that Hua Hong has received the registration approval from the China Securities Regulatory Commission (CSRC).
According to Hua Hong's prospectus, CNY18 billion of the raised capital will be allocated for Hua Hong's Wuxi project, optimizing and upgrading its 200mm fab, R&D on its the specialty process technology, and supplementary working capital. Among these, Wuxi project is the key focus of Hua Hong Semiconductor's current fundraising efforts.
The Wuxi project is estimated to receive a total investment of US$6.7 billion, and it plans to use CNY12.5 billion of the raised capital, accounting for 69.44% of the CNY18 billion raised. The project aims to expand Hua Hong's existing 300mm specialty-node production in Wuxi to a monthly capacity of 83,000 wafers, focusing on automotive-grade chips. The project also aims to further improve process platforms for embedded/discrete memory, analog and power management, and high-end power devices.
Currently, the Wuxi site has a monnthly capacity of 65,000 wafers and manufactures at 90 - 65/55nm nodes. It mainly produces power semiconductors.
Expansion of the Wuxi fab started at the end of June, and is expected to complete by the fourth quarter of 2024, with volume production due in 2025. According to Chinese media reports, the Wuxi site will eventually reach a monthly production capacity of 180,000 wafers, becoming China's leading 300mm-based specialty process research and manufacturing base.
Hua Hong operates three 200mm wafer fabs, in addition to its 300mm wafer fab in Wuxi. As of December 31, 2022, its combined production capacity reached 324,000 wafers per month (equivalent to 8 inches), ranking second in mainland China in terms of total capacity.
Hua Hong's annual sales in 2022 grew by 51.8% to US$2,475 million - a record high for the second-largest pure-play foundry in China. In the same period, its profit rose by 76% to US$406 million.
Hua Hong Semiconductor's capital allocation plan (Unit: CNY100 M) | ||
Project name | Estimated allocation of capital raised | Estimated share |
Wuxi fab expansion | 125.00 | 69.44% |
200mm fab upgrade | 20.00 | 11.11% |
Speciality technology R&D | 25.00 | 13.89% |
Supplementary working capital | 10.00 | 5.56% |
Total | 180.00 | 100% |
Source: Hua Hong Semiconductor. Assembled by DIGITIMES.
