Intel-backed Chinese chipmaker UNISOC seeks to raise $706m ahead of IPO

UNISOC, an Intel-backed Chinese semiconductor firm that specialises in developing chipsets for mobile communications and internet of things (IoT), is planning to raise up to 5 billion yuan ($706 million) ahead of a planned initial public offering (IPO) on the country’s newly-launched STAR Market.

UNISOC, a subsidiary of state-backed semiconductor conglomerate Tsinghua Unigroup, is offering up to a 9.09 per cent stake as part of the fundraising at an expected valuation of about 55 billion yuan ($7.76 billion), the company recently said in a filing with the China Beijing Equity Exchange (CBEX).

CBEX is an equity transaction bourse and platform run by the government of Beijing for mergers, acquisitions and restructuring of state-owned enterprises.

Each investment institution, or an investment consortium composed of no more than three parties, is required to subscribe to at least 1 billion yuan ($141 million) worth of shares to participate in the deal. The company will only accept RMB-denominated capital contribution, according to the filing.

UNISOC, in which Intel China holds approximately 14.28 per cent stake after it invested in the firm in July 2015, plans to use the proceeds for research and development of its core 5G and IoT technologies and products.

UNISOC serves as a fabless semiconductor company specialized in the research and development of core chipsets in mobile communications and IoT. Its products cover mobile chipset platforms supporting communication standards ranging from 2G to 5G, and various chipset solutions in the fields of IoT, wireless connection, security and TV, among others. The firm, with about 4,500 employees, has 14 research and development centres and four customer support centres worldwide.

The firm booked revenue of 7.303 billion yuan ($1.03 billion) and a net profit of 255 million yuan ($36.07 million) in 2018, according to its financial report. Tsinghua Unigroup is the largest shareholder with 57.14 per cent shares.

The fundraising plan comes about five months after the company announced its plan of going public on the Chinese newly-launched STAR Market by 2020, which would help the firm “realize more transparent and standardized company operation and management.”

The company said by then that it aimed to complete a pre-IPO funding round – which might be this disclosed round – and restructuring of the firm within 2019.

The Star Market, ordered into existence last November by Chinese president Xi Jingping and officially launched this July, was created to nurture technological innovation in China and to shrink off reliance on foreign imports. The Nasdaq-style stock market already witnessed wild gains in prices and a few eye-catching IPOs including the $400 million listing of Transsion, a Shenzhen-based smartphone maker that currently dominates the African market.

In contrary to the rising domestic bourse is the murky situation of China’s biggest semiconductor company listed in the United States.

China’s biggest semiconductor company, Semiconductor Manufacturing International Corp. (SMIC), voluntarily delisted its shares on the New York stock exchange this May due to “low trading volumes of its American depositary receipts (ADRs) and the high costs of maintaining the listing and complying with reporting requirements and related laws,” said SMIC in a filing.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.