The stock price jump follows the company’s IPO, raising $454 million in Japan’s biggest IPO yet for the year. Socionext’s listing dwarfs the country’s second-biggest offering from outsourcing firm Bewith, which raised $55 million in October. Globally, IPOs are down as companies postpone listings due to concerns over geopolitical tensions and an impending economic slowdown driven by inflation and rising interest rates.
Socionext was created in 2015 from the semiconductor divisions of Fujitsu and Panasonic Holdings. The company designs “systems on a chip,” which combine multiple functions — like computer processing, graphics processing, Wi-Fi, memory, and other important functions — on a single chip. Due to their small size and greater energy efficiency, these chips are mainly used in mobile devices, such as smartphones and tablets, and “Internet of Things” devices.
Socionext serves companies working in the automotive sector, as well as 5G technology providers.
Socionext shares were down slightly on Thursday, falling 0.5% at 3:00 p.m. Japan time, matching a similar 0.6% drop in the Tokyo stock price index.
Flea market deflation
Socionext’s strong debut is a rare bright spot for the semiconductor industry.
Semiconductor companies have lost a combined $240 billion in market value since the Biden administration announced tough new export controls on chip sales to China. Chip companies that use American equipment can no longer sell the most advanced chips to any Chinese company, and cannot sell even less advanced chips to nearly 30 major Chinese tech companies. Sales of chip-making equipment are also blocked.
The Philadelphia Semiconductor Index, which tracks major semiconductor companies like Nvidia and Advanced Micro Devices, is down 6.7% since Monday. Asian chip stocks are also down. Shares of Taiwan Semiconductor Manufacturing Corporation, the world’s largest contract chipmaker, have fallen 9.5% since the weekend, while China’s Semiconductor Manufacturing International Corporation, the country’s largest chipmaker , fell 11.4% over the same period.
On Thursday, TSMC announced that it would cut its capital expenditure target for the year by 10%.
Chip companies were already struggling due to a slowdown in consumer electronics sales. Intel plans to cut thousands of jobs in its sales and marketing divisions due to slowing personal computer sales, Bloomberg reported Tuesday.
PC sales are down nearly 20% from a year ago, according to a Gartner report on Tuesday.
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