Imagination Technologies, a top UK semiconductor company acquired by a state-backed Chinese fund, ranks a listing on the Shanghai stock exchange’s tech board as its top option once it is ready to float shares, according to Reuters.

Why it matters: The chip design company is at the center of a geopolitical storm between China, the UK, and the US.

  • In the beginning of April, the UK government intervened in an attempted boardroom takeover that they saw as leading to the transfer of key technological intellectual property to China.
  • The private equity firm that bought Imagination Technologies in 2017, Canyon Bridge, is backed by Chinese state-backed venture capital firm China Reform Holdings.

Read more: Imagination Technologies: What’s at stake in the fight over control

Details: The UK chipmaker’s financials have been in a bad state for a while now, recording an operating loss of $23 million in 2019, a Reuters source said. An initial public offering is a few years down the line, according to the report.

  • The Nasdaq-style tech board at the Shanghai stock exchange is a “top option,” the report said citing a source with knowledge of the matter.
  • “There is an enthusiasm towards semiconductor companies in China, with the STAR Market. Many semiconductor companies have listed there and valuations have been attractive,” the source told Reuters.
  • The focus is to save the business, not re-domicile it in China, Reuters’s sources said.

Context: The boardroom takeover was cancelled after intervention from prominent conservative members of the UK Parliament.

  • With more than 30 years worth of patents, the company is one of the UK’s most valuable strategic tech assets.
  • Imagination Technologies’ CEO, CTO, and CPO all quit after the attempted boardroom takeover by Canyon Bridge.
  • About 11 billion devices or 30% of the world’s mobile phones, as well as 40% of cars use graphics chips developed by Imagination Technologies, Sky News said.
  • The semiconductor designer’s shares fell in 2017 after it lost Apple, its biggest client. Cayman Islands-based Canyon Bridge swooped in to buy it for £550 million ($688 million).
  • In January 2020, the Financial Times reported that the firm would be selling to Apple again.
  • The STAR Market launched last year to attract more IPOs from tech companies in China. The tech board has relaxed listing rules relative to other exchanges in the country.
  • At least five top semiconductor companies were reportedly accelerating plans to publicly list on the tech board in response to Beijing’s push for technological self-reliance.

Eliza Gkritsi

Eliza was TechNode's blockchain and fintech reporter until July 2021, when she moved to CoinDesk to cover crypto in Asia. Get in touch with her via email or Twitter.