Visitors visit the stand of Huahong Group at an exhibition in Shanghai, China, June 15, 2023. On August 7, 2023, Huahong Group, the world’s sixth largest foundry semiconductor manufacturer, officially landed on the A-share science and technology innovation board, and the opening price rose by greater than 13% on the primary day. (Photo by Costfoto/NurPhoto via Getty Images)
Costfoto | Nurphoto | Getty Images
Shares of Chinese chipmaker Hua Hong jumped 13% on the open during its market debut on Shanghai Stock Exchange’s Star Market on Monday, but quickly gave up gains.
Hua Hong is China’s second-largest chip foundry after Semiconductor Manufacturing International Corp. (SMIC).
Shares of the chipmaker opened on the Nasdaq-style Star Market at 58.88 Chinese yuan, in response to Refinitiv data. That is a 13.2% jump from its offer price of 52 Chinese yuan ($7.23).
The Shanghai-listed shares have since pared gains and were trading lower at 53.99 Chinese yuan on Monday afternoon.
The corporate, which produces semiconductors using advanced wafer process technologies, previously said that it’s going to sell 407.75 million shares at a price of 52 Chinese yuan per share, in response to a filing.
Hua Hong’s Shanghai debut raised 21.2 billion yuan ($2.95 billion) — in what was the most important IPO in mainland China up to now this yr, in response to EY’s global IPO report.
Chips produced by the Shanghai-based company are used in industries spanning consumer electronics, communications, computing, industrial and automotive.
Hua Hong has been listed in the Hong Kong exchange since 2014. Its Hong Kong-listed shares plummeted as much as 7.4% on Monday.
Phelix Lee, equity analyst at Morningstar Asia, said the scale of Hua Hong’s IPO will not be significant.
“I do not think it’s an enormous deal in the grand scheme of things because the deal size is smaller than SMIC’s IPO 2 or 3 years ago,” said Lee. “The trend of encouraging local chipmakers and other semi-related firms to list domestically is unbroken and we view there are more semiconductor IPOs to come back.”
SMIC raised 46.28 billion yuan ($6.62 billion) during its IPO in 2020.
Hua Hong’s listing comes as Chinese firms seek to boost capital to ramp up on advanced chip tech as China seeks self reliance on advanced chip tech amid Washington’s efforts to chop Beijing off from advanced chip tech.
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