GigaDevice Sells Its Stake in SMIC, as the Foundry Faces Star Market IPO
GigaDevice's wholly-owned subsidiary has sold all H-shares of SMIC (00981:HKEX), China's largest foundry, at approximately CNY 776 million (around USD 110 million). - In the case of the technical ban on Huawei issued by the United States, SMIC, as the most suitable foundry spare tire, will soon be traded on the Star Market in July. The secondary IPO will help SMIC increase R&D investment and improve competitive advantages. - Compared with the valuation in the mainland stock market, the price of H shares is lower. For instance, the close price of CRSC’s A and H shares on June 29, 2020 is CNY 6.35 and HKD 3.3 per share respectively. GigaDevice is likely to buy SMIC shares from Star Market.