Buying Into China’s Chip Dreams Means Paying a Patriot’s Price
A $7 billion share sale by SMIC shows the divergence between earnings and nationalism.
China is placing bets on would-be technology stars.
Photographer: Barcroft Media/Getty
China’s greatest hope to become a major player in the semiconductor sector earns more from interest income than from making chips. I could end the story there, with a warning that there’s more profitable companies in which to park your money.
But Semiconductor Manufacturing International Corp. now finds itself the star of a patriotic blockbuster. The Shanghai-based company is raising as much $7.6 billion in a China A-share listing to fund a vision of competing with global giants. That’s more than double its revenue last year and three times the cash it had on hand at the end of December.