On the night of May 24, a big news appeared again in the circle of microblog friends. According to official sources, SMIC has delisted in the United States, which makes Netizens feel confused. Even Xiaobian doesn't understand. So what's the reason for SMIC delisting in the United States? Why do you choose to withdraw from the US stock market at this moment?
SMIC announced delisting from US stock market
On the evening of May 24, SMIC international, which is listed in Hong Kong and the United States, announced on the Hong Kong stock exchange that it had decided to withdraw from the New York Stock Exchange on its own initiative and had been approved by the board of directors.
According to the plan, after the delisting takes effect and the deregistration conditions are met, SMIC will submit form 15F to the SEC around June 14 this year. Under the U.S. Securities and Exchange Act, a declaration to deregister SMIC with the SEC and terminate its reporting obligations will take effect within 90 days of filing form 15F.
In response, Gu Wenjun, founder and chief analyst of domestic semiconductor market research company xinmou research, said that it was not accurate to say that SMIC withdrew from the US stock market, but continued to maintain ADR (American Depository Receipt) and actively downgraded to OTC (over-the-counter market).
In short, SMIC does not completely withdraw from the U.S. stock market, but withdraws to the OTC market, which will not affect the transaction. U.S. investors can continue to hold or conduct related transactions in the OTC market.
What are the reasons for the sudden delisting?
According to the announcement issued by SMIC, the company decided to withdraw from the New York Stock Exchange for two reasons:
The trading volume of ads is limited compared with its global trading volume; The administrative burden and cost of maintaining a New York Stock Exchange listing, registering with the U.S. Securities and Exchange Commission, and complying with the regular reports of the exchange law, as well as the related obligations, are excessive. As a result, SMIC voluntarily delisted its ADSS shares from the New York Stock Exchange and deregistered the ADSS shares and related common shares. At present, SMIC's main body is actually in Hong Kong stock market, and the help of listing in ADR to the company's finance is really limited.
SMIC was listed on the New York Stock Exchange and the stock exchange of Hong Kong on March 17 and 18, 2004 respectively. In the latest trading day, SMIC's closing price on the New York Stock Exchange was US $5.50, its share capital was 101 million, and its market value was only US $555 million. Since its listing, SMIC's share price has gradually declined, at least less than US $1 in 2008. On the Hong Kong market, SMIC's total market value is HK $42.522 billion, far exceeding that of the New York Stock Exchange.
The market believes that when the valuation of listed companies is not high, or the financing is not smooth, the transaction is not active, coupled with the daily high administrative costs, many companies will choose to withdraw from the capital market.
Why delisting from US stock market at this moment? Market Association
The withdrawal of SMIC from the New York Stock Exchange comes at a time when Sino US trade frictions continue to escalate, and the trend of strategic adjustment behind it has attracted much attention. It has been rumored that if Huawei is blocked by the US, once TSMC no longer manufactures Hisilicon's 14nm process, in the long run, this part of its business is expected to be transferred to SMIC international for OEM production.
Insiders of SMIC said that at present, SMIC can produce some 14nm chips on behalf of others, but it does not include more advanced products of 14nm and below.
The industry believes that Huawei is good at chip design, while SMIC's main business is chip manufacturing. The upstream and downstream cooperation between the two enterprises can create a strong industrial chain.
The U.S. crackdown on Chinese enterprises is spreading from the technology embargo. According to foreign media reports, recently, Bannon, a former adviser to us president trump, said that "the United States should stop all IPOs of Chinese enterprises in the United States, and at the same time restrict Wall Street's investment and financing of Chinese enterprises, until we see China make fundamental reforms that the United States wishes.".
However, Bob middot, chairman of NASDAQ Asia Pacific region; Bob mccooey to Steve middot, former adviser to the president; In response to Steve Bannon's "cut off all IPOs," Bob said there was no reason for that.
'like many people, I saw Steve middot, President Trump's discredited former adviser; What Bannon said. I don't think these words make any sense. American capital market is the best capital market in the world, with transparency, deep liquidity, mature global investors and the support of NASDAQ and other exchanges. In 2018, there were 22 IPOs from China, and this year there have been 15. We are looking forward to seeing a large number of Chinese companies come to NASDAQ. We see Chinese companies as part of our family of global leaders and will support them. " McCoy said The chairman of the U.S. Securities and Exchange Commission leads an independent organization that doesn't have to report to the president. Our principle is: welcome companies from all over the world, especially Chinese companies. China is our biggest market. " McCoy added.
The rise of the largest generation factory in the mainland
As the largest foundry in the mainland, SMIC was founded by Zhang Rujing, founder of Shida semiconductor, the former Taiwan's third largest wafer foundry.
In 2000, Zhang Rujing brought more than 300 engineers from Taiwan to Shanghai to set up SMIC. This move is regarded by the industry as epoch-making significance for China's semiconductor industry.
At that time, the overall development of the mainland semiconductor market was backward, and the industry was in the cold. Relying on her personal industry contacts and experience, Zhang Rujing purchased a large number of low-cost second-hand equipment, quickly established three 8-inch wafer production lines for SMIC, fully prepared the production capacity before the recovery of the industry, and set the world's fastest chip factory construction record.
Around 2003, in order to expand its scale again, SMIC successively opened two 12 inch wafer factories in Beijing almost at the same time, and purchased a Motorola factory in Tianjin at a low price. In this way, SMIC has built six factories in more than three years since it was founded, and the initial IC line width has been from 0.25 μ m to 0.18 μ m to 90nm.
Then, in order to improve the quality of employees, reserve talents for SMIC, and make full use of production capacity, SMIC began to enter the DRAM market, seeking OEM cooperation for large international IDM companies, thus laying the foundation for the company's OEM.
At the end of 2017, SMIC recruited Liang Mengsong, a leading expert in the industry. During his tenure at TSMC, he personally participated in the invention of 181 pieces of patented semiconductor technology, all of which are the most important advanced technology research and development; After going to Samsung, he led Samsung wafer foundry to upgrade directly from 28nm to 14nm, even leading TSMC to achieve mass production for half a year.
After arriving at SMIC, Liang Mengsong made a big start. While rapidly improving the yield rate of 28nm chips, he also led the purchase of the most advanced lithography machine from Holland, which instantly increased the yield rate of 14nm chips to 95%. Even Samsung made a big alarm for this.
Driven by the accumulation of talents and experience, SMIC has become the fourth largest professional wafer foundry in the world and one of the cores of China's semiconductor manufacturing.