Brite Semiconductor gets go-ahead for IPO
The Shanghai Stock Exchange says it has approved the listing of Brite Semiconductor, after reviewing Brite's relationship with chip foundry SMIC.
Brite originally applied to list on Shanghai's Nasdaq-style STAR Market in October, but the process was suspended when the exchange sought assurances that Brite was not controlled by SMIC or any other firm. SMIC has a minority stake in Brite and is its largest supplier, having accounted for nearly 85% of Brite's outgoings last year.
What makes things more complicated is that, while SMIC was blacklisted by the Trump Administration in December 2020, Brite has avoided US sanctions and continues to enjoy access to US technology. Yet, according to Reuters, Brite offers chip design services to at least six Chinese military suppliers.
For its part Brite denied having a controlling shareholder, and claimed it has processes to prevent SMIC and other shareholders from taking over the company. To make matters more complex, the company has received funding from a US venture capital firm backed by Wells Fargo and a Christian university.
This week, the Shanghai Stock Exchange concluded its investigation and announced that Brite has met all the conditions for an initial public offering (IPO). Brite is looking to raise 600 million yuan (USD 84 million).
The news did not go down well in the US. On Wednesday, Republican Marco Rubio urged the Biden administration to sanction Brite. He pointed to revelations in the Reuters reporting and wrote an open letter to to Commerce Department Secretary Gina Raimondo.
"Brite's example shows that swift action is needed now to prevent China's chip industrial base from growing stronger," Rubio said. "I urge you to impose the same licensing requirements on Brite that are imposed on SMIC."