Nexchip Semiconductor filed for a listing on the Hong Kong Stock Exchange on Tuesday, joining a stampede of Chinese chip companies turning to the city's capital markets as Beijing pours resources into building a domestic semiconductor supply chain that can withstand American export controls. The Hefei-based foundry, China's third largest behind SMIC and Hua Hong Semiconductor, is seeking a dual listing alongside its existing Shanghai shares, a move designed to tap international capital for what amounts to an industrial expansion of extraordinary scale.
The filing arrives just weeks after Nexchip completed full-process development of its 28nm logic platform, a milestone announced on 11 March that marks the company's push into higher-value chipmaking. Until recently, Nexchip's core capabilities sat at 55nm to 150nm, the sort of mature process nodes used in display drivers, power management chips, and image sensors. The 28nm breakthrough, while still far behind the cutting-edge 3nm and 5nm processes produced by TSMC and Samsung, represents a meaningful step up in the mature-node hierarchy and positions Nexchip to capture demand from AI-enabled smartphones, smart vehicles, and OLED display panels.
The money Nexchip needs to raise explains the Hong Kong listing. In January, the company broke ground on its Phase IV project in Hefei's Xinzhan High-Tech Zone, a 35.5 billion yuan ($5.1 billion) investment that will add a new 12-inch wafer production line with a designed monthly capacity of 55,000 wafers at 40nm and 28nm nodes. Equipment installation is planned for the fourth quarter of this year, with initial production to follow and full capacity expected by the second quarter of 2028. That is on top of Nexchip's existing N3 fab, which is ramping to 100,000 wafers per month at 55nm and 40nm, focused primarily on high-end CMOS image sensors.
The numbers tell a story of a company growing fast but needing capital to sustain that growth. Nexchip reported 2025 revenue of 10.89 billion yuan (approximately $1.58 billion), up 17.7 per cent year on year, with net profit rising 32 per cent. TrendForce analysis from early 2025 predicted the company would overtake Taiwanese foundries VIS and PSMC to move from tenth to eighth in global foundry rankings. It is a trajectory that reflects both genuine commercial momentum and the structural advantages of operating within China's heavily subsidised semiconductor ecosystem.
The 💜 of EU tech
The latest rumblings from the EU tech scene, a story from our wise ol' founder Boris, and some questionable AI art. It's free, every week, in your inbox. Sign up now!
Nexchip's origins are instructive. The company was established in 2015 as a joint venture between Hefei City Construction Investment Holding, a state-owned enterprise, and Taiwan's Powerchip Technology Corporation. Powerchip provided the technical foundation; Hefei provided the land, the capital, and the political will. Less than a decade later, Nexchip has transformed from a technology-transfer vehicle into a competitor that its Taiwanese partner now watches with some unease. The primary controlling shareholder remains the Hefei state entity, which held approximately 39.7 per cent of shares as of September 2025.
The Hong Kong filing places Nexchip within a broader wave of Chinese semiconductor listings that is reshaping the exchange. Deloitte forecasts roughly 160 new Hong Kong listings in 2026, raising at least HK$300 billion, with AI and semiconductor companies driving the fundraising surge. Biren Technology, a Chinese AI chip designer, surged nearly 120 per cent on its Hong Kong debut earlier this year after raising HK$5.58 billion. Baidu's chip unit Kunlunxin has filed confidentially. GigaDevice Semiconductor is targeting HK$4.68 billion. The pipeline reflects a strategic calculation: with access to advanced chips increasingly restricted by export controls, Chinese companies need capital to build domestic alternatives, and Hong Kong offers a bridge to international investors that mainland exchanges cannot.
The mature-node market that Nexchip occupies is where China's semiconductor strategy is most coherent, and most consequential. Blocked from manufacturing chips below 14nm by US sanctions targeting advanced lithography equipment, Chinese foundries have concentrated investment on the nodes that matter for the vast majority of the world's electronics: the 28nm and above processes used in cars, industrial equipment, consumer devices, and the internet of things. Industry estimates suggest that more than half of all new global capacity additions at mature nodes through the mid-2020s are located in China. By the end of 2025, Chinese foundries were expected to account for more than 25 per cent of global top-10 mature-node capacity.
The pricing dynamics confirm the strategy is working. On 12 March, Nexchip announced a 10 per cent increase in foundry fees effective from June, following similar hikes by SMIC and Hua Hong. The company cited geopolitical instability, supply chain volatility, and higher raw material costs. It also disclosed that its Fab 2 (six-inch) and Fab 5 (eight-inch) facilities will shut down by the end of 2027, a move that will further constrain eight-inch supply and add upward pressure on pricing across a sector where capacity is already tight.
The consolidation among China's foundries adds another layer. SMIC recently acquired the remaining 49 per cent stake in its mature-node subsidiary SMIC North for $5.7 billion. Hua Hong absorbed Shanghai Huali Microelectronics for $1.2 billion, instantly securing 38,000 12-inch wafers per month of additional capacity at 65nm to 40nm. These are not the actions of companies in a sunset industry. They are the actions of companies building scale for a market they believe will only grow as AI proliferates beyond data centres and into every device that needs a chip, which is to say, nearly every device.
For Nexchip specifically, the Phase IV expansion is a bet that the transition from 55nm workhorses to 28nm platforms can happen fast enough to capture the next wave of demand. Its customer base already includes SmartSens, a leading Chinese image sensor designer, and Xiaomi. The 28nm logic platform opens doors to a broader range of clients building AI-enabled products that require more sophisticated silicon than the sensors and display drivers that have been Nexchip's bread and butter.
Whether the Hong Kong listing will raise enough to fund all of this remains to be seen. The $5.1 billion Phase IV price tag is substantial for a company with $1.58 billion in annual revenue, even one backed by a municipal government with deep pockets and a mandate to build chip self-sufficiency. But the listing signals something broader than one company's capital needs. It signals that China's mature-node foundry push, far from slowing, is entering a phase of deliberate acceleration, financed by global capital markets and driven by the conviction that the chips the world needs most are not the ones it cannot make, but the ones it is determined to make in quantities that no competitor can match.