Contract chipmaker Hua Hong Semiconductor has long played second fiddle to China’s national champion Semiconductor Manufacturing International Corp in their home base of Shanghai, but US restrictions on advanced technology and Beijing’s yearning for chip self-sufficiency have thrust it into the spotlight.Already listed in Hong Kong, China’s second-largest chip foundry received regulatory approval last month for a $2.5bn secondary listing in Shanghai on the tech-centric Star Market. Most of the funds to be raised are intended for upgrading and expanding its production facilities.
Hua Hong’s lack of cutting-edge technology has proved a boon rather than a handicap of late. During its third-quarter earnings call in November, the company said it had been barely affected by the actions of the US, as the chips it produces are several generations older than the latest microprocessors.
Industry experts said China had to re-evaluate its domestic semiconductor supply chain after Washington imposed curbs on the development of high-performance chips. Hua Hong’s focus on older chips could make it Beijing’s new favourite, with the benefits of policy support and funding to follow.