Automotive Exports December 2022

China’s chip
maker to raise
billions amid US
export curbs
Chinese chip manufacturer Hua Hong
Semiconductor has received regulatory
approval for an 18 billion yuan ($2.5 billion)
IPO in Shanghai, according to a Hong Kong
stock exchange filing.
The planned initial public offering (IPO)
comes as China’s chip companies gear up
for steeper competition with the United
States due to geopolitical tensions.
US President Joe Biden introduced
unprecedented export curbs aimed at
stopping Beijing from acquiring advanced
semiconductor technology.
New rules bar American citizens, residents
and green-card holders from working with
China’s chip makers. Hua Hong says it
intends to use the money to invest in a new
fabrication plant – or fab – in the eastern
city of Wuxi, with construction set to
begin in 2023 and an eventual production
capacity of 83,000 wafers per month.
The company currently has four fabs in
total – three 8-inch fabs in Shanghai,
and one 12-inch fab in Wuxi currently
expanding to 95,000 wafers per month.
The proceeds from the IPO will also go
to upgrading the latter fab, according to
its prospectus. Hua Hong’s Shanghai IPO
will follow that of China’s Semiconductor
Manufacturing International Corp (SMIC),
China largest chip manufacturer.
Washington has barred US-based
equipment makers from selling tools to
Chinese foundries for production of logic
chips produced at 14-nanometers and
below. Hua Hong specialises in mature
technology, and generates most of its
revenue making chips using 55-nanometer
process technology.
The company has a global market share
of 3.2 percent of the foundry business,
according to research firm TrendForce.
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