SMIC Goes Public and Raises $1.8 Billion

Semiconductor Manufacturing Int. Corp. (SMIC, China), the mainland Chinese silicon foundry headed by former Texas Instruments Inc. (TI, Dallas, TX) executive Richard Chang, has raised $1.8 billion in an initial public offering that was 15 times over-subscribed. As a result of the offer, SMIC will have $1 billion to spend on its 300 mm fab in Beijing, and on upgrading its 200 mm fabs in Shanghai and Tianjin, China. The Tianjing fab was bought by SMIC from Motorola Corp.

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 remarks by its CFO Jenny Wang 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.