(Yicai Global) June 1 -- Jingjia Microelectronics' stock soared after the Chinese chip developer said it plans to raise CNY4.2 billion (USD591 million) through a private placement of shares to invest in two projects to develop chips for graphics processing units.

Jingjia Microelectronics [SHE: 300474] ended 10.7 percent higher at CNY106.68(USD14.84) a share in Shenzhen today, after surging by as much as 19.3 percent in the morning trading session. 

It will raise the funds by selling new shares to specific investors, the Changsha-based firm said late yesterday. After issuance costs, about CNY3.3 billion will be invested in the research and development of high-performance general-purpose GPUs and industrialization, while the rest will be used to build an R&D center for general-purpose GPU's advanced architecture, it added. 

The projects will help the innovative application and development of self-made GPU products, break the market monopoly of some overseas products and export controls of some foreign governments, and replace imported GPU products with domestic ones in the gaming, professional graphics rendering, data centers, artificial intelligence, and autonomous driving fields, the firm noted without disclosing any performance targets.

Jingjia Microelectronics was included in the US commerce department’s list of entities under export controls at the end of 2021 after it gained technical advantages in GPU design.

The company is addressing business development issues resulting from the US restrictions by replacing imported products with domestic ones, self-development, and collaboration on R&D, it said.

Editor: Martin Kadiev