Xiaomi-backed chip developer VeriSilicon gets green light for $111m STAR Market IPO

Photo by Alexandre Debiève on Unsplash

VeriSilicon Microelectronics, a Chinese semiconductor firm backed by Xiaomi and China’s Big Fund, has received the go-ahead from the Shanghai Stock Exchange (SSE) to float its shares on the Nasdaq-style STAR Market.

The Shanghai-based company, which claims a valuation of no less than 3 billion yuan ($421 million), plans to sell about 48.32 million shares in the offering.

According to its prospectus, VeriSilicon seeks to raise up to 790 million yuan ($111 million) to invest in the development and commercialisation of chips for smart wearable devices, intelligent vehicles, intelligent home appliances and smart city projects, among others.

Founded in 2001, VeriSilicon provides platform-based customised silicon solutions and semiconductor intellectual property (IP) licensing services. It focuses on the design, production, test, and packaging of silicon products for integrated device manufacturers, fabless system vendors as well as large-scale internet companies.

Its business covers consumer electronics, automotive electronics, computer and peripheral, data processing, Internet of Things (IoT) and other applications. Its clients include Facebook, Intel, Google, Amazon, smartphone brand Huawei, and Shanghai-based fabless semiconductor firm Unisoc.

The company has five design and R&D centres in China and the United States, as well as 10 sales and customer service offices worldwide. It has over 900 employees.

China’s state-backed National Integrated Circuit Investment Fund, also known as Big Fund, holds a 7.98 per cent stake in VeriSilicon, while Chinese smartphone maker Xiaomi owns 6.25 per cent, according to the prospectus.

Shares held by China’s Big Fund and Xiaomi will reduce to 7.19 per cent and 5.63 per cent, respectively, after the listing.

VeriSilicon’s listing plan comes amid an increasingly fierce tech feud between the United States and China. Having generated at least 60 per cent of revenues from markets outside of mainland China, the company warned that “potential adverse impacts” on its operations could incur amid continued trade frictions between China and other economies.

“Trade protection measures taken by some countries have had negative influences on the development of certain industries in China,” said the company in the prospectus. “Chinese enterprises could face continuously rising international trade frictions and disputes in the future.”

The pre-profit company registered 608 million yuan ($85 million) in operating income in the six months ended June 30, 2019. Annual operating income stood at 1.06 billion yuan ($149 million) and 1.08 billion yuan ($151 million) in 2018 and 2017, respectively, according to its prospectus.

China Merchants Securities Co Ltd is the lead underwriter of the deal.

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.