Chinese company Hygon Information Technology is known to the general public for its not-so-successful collaboration with AMD, which began shortly after Lisa Su took over as CEO but ended in 2019 after tightening U.S. export controls. Hygon’s shares went public in Shanghai this week, valuing the company’s business at $20.7 billion.
Image Source: Hygon Information Technology
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In fact, as explained Nikkei Asian Review, Hygon Information Technology’s initial public offering came at a price 94% higher than the estimated price, which indicates investor confidence in the further growth of the company’s business. This developer of central processing units and accelerators for machine learning systems was founded in 2014, the company’s R&D expenses reach 70% of its rather modest revenue, which did not exceed $341 million last year.
It cannot be excluded that access to capital in the stock market will allow Hygon to open a new stage in the development of the company. Until 2019, she had access to the technological capacities of TSMC and GlobalFoundries, since received from them are licensed clones of AMD EPYC and Ryzen processors of the first generation with an encryption block modified to Chinese national standards. Subsequently, US sanctions limited Hygon’s ability to produce these processors, forcing the company to focus on its own developments. Investors probably proceed from the prospects of intensifying public investment in the semiconductor sector of the Chinese economy, since now it meets the needs of the national market in components by only 20%, which is far from the targets.
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