Alibaba Group headquarters in Hangzhou, archive: Thomas Lombard / Wikimedia (CC BY-SA 3.0, cropped)
Alibaba Group Holding plans to spin off its semiconductor unit T-Head and list the chip designer’s shares in Hong Kong, the company said in a stock exchange filing on Tuesday.
Under the proposal, T-Head (Shanghai) Technology Co. would offer its H shares to the public in Hong Kong and place shares with institutional and professional investors. The Hong Kong Stock Exchange has confirmed that Alibaba may proceed with the spin-off, and T-Head submitted a confidential listing application on September 11, according to the filing.
Alibaba said T-Head is expected to remain its subsidiary after the offering is completed. The size and structure of the offering, and how much Alibaba’s stake would decrease, have not been finalized.
The plan still requires approval from the exchange’s Listing Committee, the completion of a filing with the China Securities Regulatory Commission, and final decisions from both Alibaba and T-Head. The company cautioned that there is no assurance the spin-off will take place or when.
T-Head was founded in 2018 out of Alibaba’s DAMO Academy research arm. It designs data-center processors, including the Yitian 710 server chip used in Alibaba’s cloud operations and the Hanguang 800 artificial-intelligence chip, and it focuses on the open-source RISC-V chip architecture. The filing describes the unit as a leading provider of full-stack data-center chips in China.
Alibaba told shareholders a separate listing would let investors value T-Head on its own merits, attract investors seeking dedicated exposure to its chip business, raise its profile with customers and partners, and give the unit direct access to equity and debt capital markets.
The company said the spin-off is small relative to the wider group: the applicable size ratios are expected to be below 5%, and the move would not affect Alibaba’s dual-primary listing status in Hong Kong and New York, where its American depositary shares trade under the symbol BABA.
JBizNews Desk | Hong Kong
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