(Yicai Global) June 29 -- Loongson Technology, a Chinese producer of semiconductor chips, plans to raise CNY3.5 billion (USD543 million) from an initial public offering in Shanghai.

Loongson will sell up to 42 million shares, or no less than 10 percent of its total stock, and list on Shanghai’s Nasdaq-like Star Market, the Beijing-based company said in a prospectus published yesterday.

CNY1.25 billion of the IPO proceeds will be invested in a three-year project to research, develop and industrialize advanced processing chips, while CNY1.05 billion will go on an R&D program for high-performance general-purpose graphic processing units. The rest will be used as liquid capital.

Founded in 2008, Loongson designs, makes and sells its own central processing units, the first high-performance general-purpose CPUs ever developed in China. In April, the firm brought out its first fully self-developed CPU architecture that uses an original instruction set. LoongArch, short for Loongson Architecture, was greeted by many in the industry as an “historic breakthrough.”

The company’s net profit surged 62 percent to CNY71.8 million (USD11.1 million) last year, the prospectus showed. Revenue more than doubled to CNY1.1 billion. It spent CNY208 million on R&D in 2020, CNY78.2 million in 2019 and CNY74.6 million in 2018, the equivalent of 38.6 percent, 16.1 percent and 19.3 percent of revenue in each of those years.

President Hu Weiwu, who indirectly owns 47.67 percent of Loongson, is the company’s actual controller.

Editor: Futura Costaglione