Alibaba Group is moving ahead with plans to separately list its semiconductor business, T-Head, in Hong Kong as the Chinese technology giant looks to unlock value from its artificial intelligence chip operations.
The company announced that T-Head had confidentially submitted a listing application to the Hong Kong Stock Exchange. The filing was made on September 11 and covers a proposed offering involving a public share sale in Hong Kong and a placement with institutional investors.
Alibaba said the exchange had cleared the proposed spin-off to proceed. However, the company has not finalized the offering size, structure or the percentage of T-Head it intends to retain after the listing.
The proposed listing remains subject to further regulatory approvals, including approval from the exchange's Listing Committee and the required filing with China's securities regulator.
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Established in 2018, T-Head is the wholly-owned semiconductor subsidiary of Alibaba. T-Head manufactures chips for data centers, artificial intelligence and Internet of Things devices.
According to Alibaba, listing T-Head separately will enable investors to value the business as an independent entity from the rest of the group. It can help the company get access to capital directly, which can assist it in building ties with customers, suppliers and other stakeholders.
This step is taken against the backdrop of Chinese technology firms stepping up investments in homegrown semiconductors to lessen reliance on foreign suppliers of chips.
In September, T-Head introduced its Zhenwu V900 AI processor. Alibaba said the chip delivers three times the computing performance of its predecessor, the M890, and supports training and inference workloads for advanced AI models.
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The listing of T-Head takes place against a backdrop of increasing competition in China’s AI semiconductors market, with firms looking at building their own options instead of using semiconductors provided by Nvidia and other foreign manufacturers. There has been no official word on any value or funding goal for the IPO from Alibaba. In addition, Alibaba also made it clear that there is no assurance that the listing will take place.