(Yicai Global) March 17 -- Chinese chip designer Chipone Technology has withdrawn its application for a CNY6 billion (USD870 million) initial public offering on Shanghai’s Nasdaq-like Star Market, possibly as a result of the downturn in the global display chip market last year.

The IPO application was pulled after the Beijing-based company and its sponsor Huatai Securities filed for a withdrawal on March 7, the Shanghai Stock Exchange announced on March 14.

Chipone had planned to use the proceeds of the share sale to fund the research, development, and industrialization of a number of products, including display and touch integration chips, multimedia processing chips, and organic light-emitting diode, or OLED, display driver chips, according to the IPO prospectus the firm filed last June.

The withdrawal of the IPO is likely due to the overall downturn in the display chip market in 2022, Zhou Hua, chief analyst at semiconductor industry research firm CINNO Research, told Yicai Global. Worldwide shipments of display driver chips fell 9 percent to about 8.1 billion units in the 12 months ended Dec. 31 from a year earlier, according to the agency’s data.

Chipmakers' shipments and prices have dropped sharply as a result of the ongoing slump in the global consumer electronics market, said Chen Hui, general manager at research firm AVC Revo. Chipone's failure to go public will have an impact on its future expansion, Chen noted.

Established in 2008, Chipone has completed seven financing rounds and secured investments from several leading handset makers. They include Xiaomi, Chipone’s sixth-largest shareholder, with a 3.7 percent stake, Huawei Technologies with 2.5 percent through two investment units, and Vivo’s with 1.6 percent, the prospectus showed.

Zhang Jinfang, Chipone's founder, chairman, and general manager is the largest shareholder with a 17.8 percent stake.

Chipone's net profit skyrocketed 17-fold to CNY932 million (USD135 million) in 2021 from the year before, according to the company. Revenue jumped 138 percent to CNY5.7 billion.

Editors: Dou Shicong, Martin Kadiev