The mainland-listed shares of Hua Hong Semiconductor (1347) will suspend trading from Monday as the Chinese chip maker proposed to purchase a sister foundry plant.
Hua Hong is planning to acquire a controlling stake in Shanghai Huali Microelectronics Corporation, a sister foundry under the same parent group, using a combination of share issuance and cash payment, aiming to resolve competition concerns stemming from its initial public offering commitments.
The target asset is Huali Micro’s No.5 wafer fab, which handles chips of 65/55 nanometers and 40nm processes, directly competing with Hua Hong’s existing business, according to an exchange filing. No transaction price has been revealed.
The No.5 fab, established in 2010, focuses on processes from 55nm down to 28nm, with a reported monthly capacity of about 38,000 wafers.
Citing the uncertainty surrounding the proposed acquisition, Hua Hong announced the trading suspension for its Shanghai-listed shares effective on August 18 and the halt is expected to last no longer than 10 trading days.
