BEIJING (Reuters) -The Shanghai Stock Exchange on Monday said that Brite Semiconductor, partly owned by Chinese chip foundry Semiconductor Manufacturing International Corporation (SMIC), met all the conditions for an initial public offering (IPO).
Reuters reported last week that Shanghai-based Brite, despite offering chip design and manufacturing services to several Chinese military suppliers and being partly owned by SMIC, which the Trump Administration blacklisted in December 2020, has avoided U.S. sanctions and continues to enjoy access to U.S. technology.
The IPO approval from the exchange came two months after it suspended the listing process in order to request Brite clarify its relationship with SMIC and submit information proving it was not controlled by the sanctioned chip foundry or any other firm.
The exchange in October questioned whether it was reasonable that Brite, which buys all of its wafers from SMIC, was seemingly paying above-average prices for these products. SMIC is by far Brite’s largest supplier, having accounted last year for nearly 85% of all funds Brite paid for goods and services.
Brite, which is looking to raise 600 million yuan ($84 million) on Shanghai’s Nasdaq-style STAR Market, has denied the purchase prices were unreasonable and maintained it has no direct or indirect controlling shareholder, as well as having mechanisms in place to prevent SMIC and other shareholders from taking over the company.
Beijing classifies Brite as a “little giant”, a 2021 statement on its website says, indicating the company is a “leader among their peers” with “preferential access to government support,” according to an August report by Berlin-based think-tank MERICS.
(Reporting by Eduardo BaptistaEditing by David Goodman and David Evans)