On July 10, China’s Nexchip debuted on the Hong Kong Stock Exchange after growing into the world’s eighth largest semiconductor foundry on its strength in older-generation chips.
Supplies of mature-node semiconductors are becoming tight as top foundries focus on advanced chips for artificial intelligence. That trend is a tailwind for latecoming Chinese players like Nexchip.
Nexchip raised HKD 6.9 billion (USD 880.3 million) through its IPO and related share issuance. Its stock opened 11% above the offering price.
Nexchip was established in 2015 under the leadership of a local government in China. Funding came primarily from a state-backed investment fund, while Taiwan’s Powerchip also invested and provided technical expertise.
Powerchip’s former president, Tsai Kuo-chih, serves as Nexchip’s chairman. Powerchip-affiliated investors now hold just over 7% of the company, but their ties still run deep.
At the listing ceremony in Hong Kong, Tsai said the company would increase R&D investment and production capacity, while speeding up its global expansion. He said the IPO shows the confidence that international capital markets have in China’s semiconductor sector.
Nexchip listed on the Star Market, the Shanghai Stock Exchange’s technology-focused board, in 2023. The dual listing in Hong Kong is aimed at reaching out to international investors and enables the company to raise Hong Kong dollars, which are more readily convertible into foreign currency, facilitating overseas purchases of equipment and technology.
Nexchip produces chips used in display panels, as well as image sensors, power management semiconductors, and other products. Its most advanced manufacturing process used in mass production is the 40-nanometer node, a technology that has been in use for nearly two decades.
The company’s growth picked up thanks to the semiconductor shortage triggered by the Covid-19 pandemic. Supported by government policies, Nexchip continued expanding production even after market conditions softened. Its annual output reached 1.67 million 300-millimeter wafer equivalents in 2025, up 74% from 2023.
Nexchip ranked eighth worldwide in semiconductor foundry revenue in this year’s January-March quarter, according to Taiwan-based research firm TrendForce. It surpassed Taiwan’s Powerchip Semiconductor Manufacturing Corporation, the company that gave it its technological start.
Chip market conditions remain favorable. As industry leaders such as Taiwan Semiconductor Manufacturing Company concentrate on advanced AI chips, TrendForce said there are signs that prices for several generations of technologies could rise by 5–10% during the July-September quarter.
Taiwan’s United Microelectronics Corporation, which also produces mature-node chips, reported that June revenue rose 22.9% on the year.
China’s largest foundry, Semiconductor Manufacturing International Corporation (SMIC), said in a May earnings briefing that semiconductor production capacity outside China is increasingly being allocated to AI-related products.
“Consumer electronics makers and other customers are seeking to secure manufacturing capacity [for chips] in China, and orders are returning,” SMIC co-CEO Zhao Haijun said.
Typically, late entrants in mature-node semiconductor manufacturing face fierce competition. Building fabrication facilities requires big investments, and established players that have already depreciated their production assets enjoy significant cost advantages. Meanwhile, customers move on to more advanced chips over time.
But Chinese chipmakers have continued investing heavily despite being latecomers. Capital spending by Chinese foundries from 2015 to 2023 exceeded their revenue by 12%, according to the US-based Semiconductor Industry Association. Companies outside of China invested an amount equivalent to roughly 33% of revenue.
A report by Rhodium Group, a US think tank, noted that Chinese foundries are able to invest under financial constraints that differ from those faced by foreign competitors, thanks in part to government support.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.
Note: HKD figures are converted to USD at rates of HKD 7.84 = USD 1 based on estimates as of July 14, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.