By Kate Yuan

(JW Insights) Jun 29 -- Leading Chinese foundry Hua Hong Semiconductor (华虹半导体) announced on June 28 that China’s state-owned Big Fund II will participate in a proposed RMB share issue as a strategic investor by subscribing to RMB shares worth RMB3 billion ($414.1 million), subject to allotment.

On June 6 this month, the China Securities Regulatory Commission approved Hua Hong Semiconductor's listing on the STAR Market of the Shanghai Stock Exchange. The company plans to raise up to RMB18 billion ($2.5 billion) in this IPO.

It will become the third wafer foundry to be listed on the STAR Market this year after this IPO, following Nexchip and SMEC.

Founded in 1996, Shanghai-based Hua Hong Semiconductor went public on Hong Kong Stock Exchange in 2014. The company has three 8-inch wafer fabs in Shanghai, as well as a 12-inch wafer fab in Wuxi of eastern China's Jiangsu Province.

The Hua Hong’s board of directors believes that the joining of Big Fund II can boost the close strategic partnership between the company and the fund, getting its ongoing support for the company through capital investment and other resources.

This move will also further enhance the company's corporate image, visibility, and market share in the Chinese mainland, and consolidate its position as a leading pure-play wafer foundry, said the company.