News and New Products

SMIC Goes Public, Raises $1.8B

By David Manners -- Electronics Weekly, 3/15/2004

SMIC, the mainland Chinese silicon foundry headed by former Texas Instruments executive Richard Chang, has raised $1.8 billion in an initial public offering that was 15 times over-subscribed.

Market watchers believe the success of the SMIC IPO is a prelude to a rash of Asian high-tech company flotations that could raise tens of billions of dollars.

Hours before the launch, SMIC put out a statement contradicting two remarks by its CFO Jenny Wang. One was that SMIC would have enough money to fund its capital requirements through to the end of 2005, which contradicted a filing the company had made with the Securities and Exchange Commission.

Wang’s other remark was that the lawsuit against SMIC brought by TSMC was "without merit." SMIC made it clear its lawyers were still evaluating the merits of the TSMC claim.

As a result of the offer, SMIC will have $1 billion to spend on its 300mm fab in Beijing and on upgrading its 200mm fabs in Shanghai and Tianjin, China. The Tianjing fab was bought by SMIC from Motorola.

In the year to the end of December 2003, SMIC made a loss of $66 million on sales of $356 million.

Electronics Weekly is the London-based sister publication of Electronic News.