By Greg Gao

(JW Insights) Jul 24 -- Hua Hong Semiconductor(华虹半导体), the Chinese mainland’s second-biggest wafer foundry after SMIC, announced its intention to initiate an IPO and list on the Sci-Tech Innovation Board of the Shanghai Stock Exchange, with plans to raise up to RMB21.2 billion(approximately $2.9 billion) on July 24.

In a statement submitted to the exchange, Hua Hong stated that it would sell 407.75 million shares at a price of RMB52($7.2) per share. Its application for initial public offering of 407.75 million A-shares and listing on the Sci-Tech Innovation Board has already been approved by the Listing Review Committee of the Shanghai Stock Exchange and has received registration approval from the China Securities Regulatory Commission, according to the company.

The company’s revenue surged 52% to a record-breaking $2.5 billion in 2022. In May, its Q1 financial report showed sales revenue of $630.8 million, a year-on-year increase of 6.1%, with a gross profit margin of 32.1%.

Founded in 1996, Shanghai-based Hua Hong Semiconductor went public on Hong Kong Stock Exchange in 2014. It has three 8-inch wafer fabs and one 12-inch wafer fab. According to IC Insights’ 2021 rankings of global wafer foundry companies by revenue, Hua Hong ranks sixth and is the largest wafer foundry company in China’s mainland focusing on specialty processes. As of the end of 2022, the combined capacity of these production bases reached 324,000 wafers per month (8-inch equivalent), making it the second-largest capacity in China after SMIC.

Hua Hong inaugurated Phase II of Wuxi IC R&D and Manufacturing Base in Wuxi, eastern China’s Jiangsu Province, on June 30. The project, with a total investment of $6.7 billion, will establish a 12-inch specialty process production line covering 65/55-40nm process with a monthly capacity of 83,000 wafers. The project will focus on automotive chips and conduct in-depth research in non-volatile memory, power management, and power devices, continuously betting on new energy vehicles, the Internet of Things, new energy, and intelligent devices.