The Tamesis
A Chinese technology company that supplies U.S. chip giant Nvidia went public in Hong Kong on Tuesday, with its shares soaring nearly 60%, raising more than $2 billion in the city’s biggest listing this year.
Huizhou Shengju Technology said it will use most of the proceeds to expand production in mainland China.
The listing comes as China races to boost domestic production of processors needed to train and power the tools that generate artificial intelligence.
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Beijing has become locked in a technological war with the West. Increasing semiconductor production capacity is part of its efforts to reduce reliance on foreign technology while also competing with U.S. strength in artificial intelligence.
Shares of Shengju Technology, headquartered in Huizhou, Guangdong, soared 59.6% to HK$335 (US$43) in early trading, after pricing at HK$209.88 and raising funds of HK$17.3 billion (US$2.2 billion).
Victory Giant, whose shares have been cross-border listed in Shenzhen, produces high-end printed circuit boards (PCBs), an important component of artificial intelligence servers.
One of its main customers is Nvidia, now the world’s most valuable company thanks to feverish global demand for artificial intelligence chips.
This initial public offering (IPO) is Zijin Gold International’s largest IPO since September, raising US$3.7 billion.
It is also the latest in a series of recent blockbuster product launches in Hong Kong by Chinese artificial intelligence-related companies, signaling optimism about China’s ambitions in the field.
IPOs benefit from Beijing’s priorities
Nvidia’s most cutting-edge artificial intelligence chips cannot be sold in China under U.S. export rules designed by Washington to protect national security.
As a result, Beijing is stepping up efforts to develop its own advanced semiconductors and wean itself off dependence on U.S. hardware.
“China continues to focus on artificial intelligence infrastructure, advanced manufacturing and semiconductor-related supply chains as strategic sectors,” Pepperstone research strategist Dilin Wu told AFP.
Therefore, “companies like Victory Giant benefit from policy support and access to financing,” she said.
Wu warned that while there is “continued demand” for high-end PCBs due to booming investment in artificial intelligence servers and data centers globally, high prices may not last.
“The current cycle continues to be characterized by tight supply in high-end PCB manufacturing,” she said.
“Whether this continues will depend on how quickly global and domestic capacity catches up with AI-driven demand growth.”
This year, China’s leading artificial intelligence startups Chipu AI and MiniMax, as well as graphics processing unit manufacturer Shanghai Biren Technology and chip company OmniVision Integrated Circuit Group performed strongly in Hong Kong IPOs.
- Vishakha Saxena Additional Editor AFP
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