Nexchip Semiconductor has applied for a listing on the Hong Kong Stock Exchange, following a trend of Chinese chip firms looking for capital in the city as Beijing invests heavily in a domestic semiconductor supply chain to counter US export restrictions. As China’s third-largest foundry after SMIC and Hua Hong Semiconductor, Nexchip, based in Hefei, is pursuing a dual listing with its Shanghai shares to attract international capital for large-scale industrial expansion.
This filing comes shortly after Nexchip announced its 28nm logic platform development, marking its advancement into high-value chip manufacturing. Previously focused on 55nm to 150nm nodes for products like display drivers and image sensors, this 28nm milestone signifies progress in mature-node technology, positioning Nexchip to meet demand in AI-enabled devices.
The need for funds underlies the Hong Kong listing. In January, Nexchip initiated its Phase IV project in Hefei’s Xinzhan High-Tech Zone, a 35.5 billion yuan ($5.1 billion) investment for a new 12-inch wafer production line with 55,000 wafer monthly capacity at 40nm and 28nm nodes. Equipment installation is set for Q4 this year, with full capacity expected by Q2 of 2028, adding to its existing N3 fab’s 100,000 wafers per month at 55nm and 40nm.
Nexchip’s rapid growth necessitates capital. In 2025, revenue reached 10.89 billion yuan (around $1.58 billion), a 17.7% increase, with net profit rising by 32%. TrendForce analysis suggested Nexchip might overtake Taiwanese foundries VIS and PSMC, moving to eighth in global foundry rankings, thanks to its strategic positioning within China’s subsidized semiconductor ecosystem.
A joint venture between Hefei City Construction Investment Holding and Taiwan’s Powerchip Technology formed Nexchip in 2015. Powerchip offered technical insight, while Hefei provided resources and political support. Now, Nexchip poses competition to its former partner, with Hefei retaining a 39.7% share by September 2025.
The Hong Kong filing is part of a broader trend among Chinese semiconductor firms, reshaping the exchange. Deloitte predicts 160 new Hong Kong listings in 2026, raising at least HK$300 billion, with the sector heavily represented. Major IPOs include Biren Technology and Baidu’s Kunlunxin. As restrictions on advanced chips grow, Hong Kong serves as a gateway to international funding that mainland exchanges lack.
China’s semiconductor strategy emphasizes the mature-node market. US sanctions prevent manufacturing below 14nm, leading Chinese foundries to focus on nodes vital for many electronics: 28nm and above. By 2025, these foundries were anticipated to contribute over 25% to the global mature-node capacity, with China leading more than half of new capacity additions.
Recent pricing trends suggest success. Nexchip raised foundry fees by 10%, following SMIC and Hua Hong due to geopolitical and supply chain challenges. Nexchip’s closure of Fab 2 (six-inch) and Fab 5 (eight-inch) by end-2027 will further tighten supply, increasing segment pricing pressure.
Consolidation among Chinese foundries includes SMIC’s acquisition of SMIC North and Hua Hong’s purchase of Shanghai Huali Microelectronics, enhancing capacity at competitive nodes. These moves illustrate confidence in expanding AI applications, broadening chip demand beyond data centers to diverse devices.
Nexchip’s Phase IV expansion is a wager on swiftly transitioning to 28nm platforms amid rising demand. Its clientele, including SmartSens and Xiaomi, can evolve with the 28nm logic platform’s enhanced capabilities. The Hong Kong listing raises questions on funding sufficiency for these ambitions, with an extensive Phase IV cost set against modest annual revenue. However, it highlights a significant momentum in China’s mature-node foundry strategy, driven by international funding and a strong commitment to produce essential chips in volumes unmatched by competitors.