Hong Kong-listed Hua Hong received approval on 7 November for an IPO on Shanghai’s Star Market, raising a hoped-for total of $2.5 billion. Hua Hong, the country’s second largest semiconductor producer after SMIC, is at the heart of the Chinese government’s self-sufficiency strategy: at the 20th Party Congress last month, President Xi Jinping declared that the high-tech industry would be “the priority of all economic policies”. Beijing has also pledged more support for domestic technology companies amid escalating trade restrictions imposed by the United States in a bid to curb the progress of China’s chip industry.According to its IPO prospectus, the state-backed company is expected to use the listing to fund capacity expansion at its production centre in Wuxi, northwest of Shanghai. The funds will also be used to upgrade its 8-inch wafer production facilities and for innovation programmes, Hua Hong said. If successful, the IPO would become the third largest on the Star Market, after national chip champion SMIC and pharmaceutical company BeiGene, both of which are also listed in Hong Kong. Hua Hong, whose most advanced technology allows for an etch fineness of 55 nanometres, has a production capacity of 324,000 8-inch wafers per month. 60% of the company’s turnover is generated by the production of 350 nm and 90 nm wafers.