Recently, the largest IPO of the year appeared.
Hua Hong Semiconductor Co., Ltd. (华虹半导体有限公司) recently has been officially listed on the Shanghai Stock Exchange Science and Technology Innovation Board. The IPO issue price was CNY 52 per share, and the opening price rose by more than 13%. Its market value once exceeded CNY 100 billion.
According to IDC, benefiting from factors such as long-term customer contracts, foundry price increases, process shrinking, and factory expansion, the global foundry market grew by 27.9% annually in 2022, hitting a new record. At the same time, Chinese wafer foundry manufacturers were actively developing. In addition to revenue growth of more than 30%, the total market share increased from 7.4% to 8.2% during the period between 2021 and 2022.
Hua Hong, which emerged in Zhangjiang, Shanghai, is the second-largest wafer foundry in mainland China and the sixth-largest wafer foundry in the world. It was listed on the Hong Kong Stock Exchange in 2014. Currently, Hua Hong has three 8-inch fabs and one 12-inch fab. As of the end of 2022, the total production capacity of the above-mentioned production bases reached 324,000 pieces per month (equivalent to about 8 inches), and the total production capacity ranked second in mainland China. In the first quarter of 2023, Hua Hong achieved double growth in both revenue and profit, of which revenue in the first quarter was USD 631 million, a year-on-year increase of 6.1%; net profit attributable to the parent was USD 152 million, a year-on-year increase of 47.9%.
Hua Hong is also facing fierce competition from its peers. Representative companies in China include TSMC, UMC, SMIC (中芯国际), PSMC, VIS, and Nexchip (晶合集成); internationally, Samsung Foundry and DB Hitek in South Korea, GlobalFoundries in the United States, and Tower in Israel are all quite powerful.
This fundraising scale of Huahong’s IPO is as high as CNY 21.203 billion, making it the largest IPO of A-share funds raised this year, and it is also the third-largest IPO in the history of the Science and Technology Innovation Board so far, second only to SMIC and BeiGene (百济神州).