The new plan is to put 25% of SMIC’s shares on the market.The lower offering values SMIC at $27.75 billion.
The China government is clearly keen for the offer to go ahead with government funds like the China Integrated Circuit Industry Investment Fund (“The Big Fund”) and the China Information and Communication Technology Group, both primed to participate.The aim is to increase and upgrade SMIC’s production capacity. Its best process is currently 14nm. Now is “a precious key opportunity” to do that says Zhou Zixue, SMIC’s chairman.However, SMIC can only do it by buying US-controlled manufacturing equipment which the US may block. In its sales prospectus SMIC states: “Our company still relies heavily on foreign chip-production materials and core chip-production equipment.”SMIC has a capex budget of $4.2 billion for 2020. 2019 revenues were $3.12 billion down from $3.36 billion in 2018.It is expected that the share sale will take place this month.
Source: This news is taken from www.electronicsweekly.com
