Alibaba announced late Tuesday that it plans to list its semiconductor subsidiary T-Head on the Hong Kong Stock Exchange through a public offering, subject to approval from the exchange and China's Securities Regulatory Commission. The company had confidentially filed for the listing on September 11. The filing did not disclose a date or proposed size for the offering.
Alibaba shares traded 1% lower on Wednesday morning following the announcement and are down about 29% year-to-date. The spinoff comes as Alibaba continues to develop homegrown semiconductors to power artificial intelligence. In late September, the company announced its next-generation AI chip, the Zhenwu V900, which it said delivers three times the performance of its predecessor, the Zhenwu M890, released in May.
Alibaba is among several Chinese companies, including Huawei, developing domestic semiconductors amid growing restrictions from the United States on China's access to advanced chips. In May, short seller Culper Research alleged that Alibaba obtained restricted Nvidia chips by indirectly financing entities in Southeast Asia, though Alibaba did not respond to requests for comment on the allegation.
The T-Head listing reflects broader challenges facing Chinese tech stocks. Baidu has reportedly delayed the listing of its AI chip entity Kunlunxin, and Chinese memory chip company YMTC has also delayed its own listing, according to news reports this month. Neither company immediately responded to requests for comment. Chinese financial regulators have increased their scrutiny on tech IPOs and capital flows into the sector in recent months.
For investors and savers in the US, the shift toward Chinese domestic semiconductor development amid US restrictions adds another dimension to the technology competition between the countries, affecting valuations of semiconductor and AI companies listed stateside.