SEMICONDUCTOR Manufacturing International Corp. (SMIC) is seeking to raise at least 46.29 billion yuan (US$6.55 billion) in a Shanghai share sale that could help the Chinese mainland’s top homegrown chipmaker compete against global counterparts as the United States tighten restrictions on the sale of technology to the nation.

The company, which had originally sought to raise about 20 billion yuan, set the sale price of its shares to be traded in Shanghai at 27.46 yuan each, it said in a filing to the Shanghai Stock Exchange on Sunday.

SMIC plans to sell 1.69 billion new shares on the Sci-Tech Innovation Board, better known as the STAR Market, according to its filing. The amount would increase to 53.2 billion yuan if a greenshoe option is exercised, the filing said. Back in May, analysts estimated a Shanghai listing could fetch somewhere in the US$3 billion range.

The offering values the company at 109.25 times its 2019 earnings, based on the expanded share base, according to the filing. By comparison, rival Taiwan Semiconductor Manufacturing Co. (TSMC) has a trailing price-earnings ratio of 21.315.

The offering would be the largest since Agricultural Bank of China Ltd.’s 68.5 billion yuan initial public offering in 2010.

Established in 2000, SMIC is the mainland’s biggest contract manufacturer of chipsets and a major piece of China’s vision to create a self-reliant and world-class semiconductor industry. SMIC plans to use the stock-sale proceeds to develop next-generation chipmaking to try to compete with Intel Corp. and TSMC. Like TSMC, SMIC is a so-called foundry that helps fabricate silicon based on other companies’ designs.

SMIC’s shares have tripled in Hong Kong this year, compared with a 9 percent drop for the Hang Seng Index, on bets trade friction with the United States will force China to focus more on home-grown tech and products to replace imports.

The effort comes at a time the Trump administration is threatening to deny domestic companies like SMIC or Huawei Technologies Co. access to crucial components and circuitry.  (SD-Agencies)