SSE STAR Market Drives China's Integrated Circuit Industry

Translated from Shanghai Securities News—www.cnstock.com

Wu Qing, Chairman of the China Securities Regulatory Commission, stressed that it is necessary to deeply grasp new industrialization led by scientific and technological innovation and increase support for key industries such as integrated circuits (IC). As the core of the information technology industry, IC is a strategic, basic and pioneering industry supporting economic and social development.

Over the past five years, by virtue of institutional innovation and capital empowerment, the STAR Market has become the first choice for IC companies to go public. At present, 116 semiconductor companies including key enterprises such as Semiconductor Manufacturing International Corporation (SMIC), Advanced Micro-Fabrication Equipment Inc. China (AMEC), and National Silicon Industry Group (NSIG) have been listed on the STAR Market, accounting for 60% of the total number of A-share semiconductor companies. This has effectively improved the resilience, independence and manageability of China's key industrial and supply chains.

Build an IC highland to boost production capacity and R&D

The STAR Market strives to build a highland of the IC industry. The listed semiconductor companies cover the whole industrial chain from design, manufacturing to packaging and testing, forming a development landscape featuring a driving role of leading players, a complete chain and collaborative innovation. In terms of industry chain distribution, companies in chip design include Loongson Technology Corporation Limited and Montage Technology Co., Ltd.; companies in wafer manufacturing include SMIC, Hua Hong Semiconductor Limited and Nexchip Semiconductor Corporation; companies in packaging and testing include China Resources Microelectronics Limited; and supporting companies include equipment manufacturers such as AMEC and NSIG.

The STAR Market attracted a large amount of capital. A total of 116 semiconductor enterprises raised 298.9 billion yuan through IPO, accounting for more than 80% of the total IPO fundraising of A-share semiconductor enterprises, accelerating the industrialization and production expansion process of enterprises. For example, SMIC's production capacity has been greatly increased. At the same time, with the help of capital, enterprises have increased R&D investment. In the first three quarters of 2024, 32.9 billion yuan was invested in R&D, and the median of R&D intensity was far higher than the overall level of A-share companies. This has promoted breakthroughs in many key technologies of companies such as Loongson Technology Corporation Limited, Hwatsing Technology Co., Ltd. and SICC Co., Ltd.

Leverage the role of reform "experimental field" and take multiple measures to support the pursuit of self-reliance and strength in science and technology

Standing at the starting point of a new semiconductor cycle, the STAR Market has taken multiple measures to support the pursuit of self-reliance and strength in science and technology. In terms of talent incentives, the equity incentive policy has been optimized, and 77 semiconductor companies have launched 150 equity incentive plans. Driven by policies, high-quality M&As have emerged in the IC industry. For example, 3peak Incorporated acquired Shenzhen ICM-Semi Microelectronics Co., Ltd. to fill the gap in product layout. In terms of refinancing, relevant rules such as the identification standard of "light assets and high R&D investment" were issued to support companies listed on the STAR Market to increase their refinancing investment in R&D. Skyverse Technology Co., Ltd. became the first enterprise to be eligible and obtain refinancing acceptance.

In addition, the STAR Market has vigorously cultivated patient capital. A mechanism for inquiry-based transfer has been established to guide capital to "relay" in an orderly manner. A market maker mechanism has been created to enhance market activity and pricing efficiency. Investment products have been continuously enriched, such as the launch of the chip industry theme index and the STAR Market chip ETF, so as to facilitate investors to share the development dividends of IC enterprises.

The above information is provided for reference purposes only and does not constitute investment advice.