Chinese chipmaker Semiconductor Manufacturing International to raise $2.8 billion via Shanghai listing

Semiconductor Manufacturing International Corp.China’s largest chipmaker, aims to raise $2.8 billion via a listing in Shanghai.

In one prospectus released this weekthe chipmaker, which trades on the Hong Kong Stock Exchange, said proceeds from the sale of shares will go to fund projects and bolster working capital as tensions between the United States and China escalate intensify.


Company expects increased business after U.S. Commerce Department in May expanded the foreign direct product rule to prevent Chinese smartphone maker Huawei from buying semiconductors from American companies. The restrictions now cover semiconductor designs and chipsets, including those outside the United States that are made with American equipment. Companies will need a license from the Department of Commerce to work with Huawei.

These expanded restrictions are expected to harm Semiconductor manufacturing in Taiwan (NYSE:TSM) and potentially send more business to the minimum wage. But with the technology stock behind TSMC from a technological perspective, some of the funding can be used to improve its capabilities. SMIC listed the rule as a potential positive in the prospectus, pointing out that certain semiconductor equipment and technology imported from the United States cannot be used to manufacture products for a number of customers unless they are not obtain Department of Commerce approval. In response to the expanded rule, TSMC agreed to build a $12 billion chip factory in Arizona.

Last month, SMIC raised $2.2 billion in funding from Chinese state investors, raising its capital to $6.5 billion from $3.5 billion.

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