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Chipmaker IPOs Signal Sector Resurgence

The word IPO seems to be coming back into conversations around the high-tech water cooler especially in the chipmaking sector.

Case in point: Semiconductor Manufacturing International (SMIC) on Wednesday filed paperwork for a $714 million IPO, the latest news out of the resurgent chip industry.

The Chinese company counts Motorola among its investors. The Chicago-area mobile handset giant owns an 11.4 percent stake in SMIC and a board seat.

SMIC will use IPO proceeds to build new plants in Beijing and improve technology and capacity at existing facilities at its Shanghai and Tianjin.

The remaining money, if any, will be earmarked for investments or acquisitions, according to SMIC's filing with the U.S. Securities and Exchange Commission (SEC). Lead underwriters for the IPO are Credit Suisse First Boston and Deutsche Banc.

The company, which is planning a separate stock offering on the Hong Kong exchange, had sales of $365.8 million last year and a net loss of $66.1 million last year, SEC document show.

Founded in 2000, SMIC makes a variety of chips for wireless devices, communications networking gear, hard disk drives and digital cameras and videocams. It will trade on the New York Stock Exchange under the "SMI" ticker symbol.

Potential investors will have to determine how much a risk they believe a SMIC legal tangle will be.

In December, Taiwan Semiconductor Manufacturing Company sued SMIC, accusing the company of conducting industrial espionage in order to steal trade secrets and infringe on its patents.

The lawsuit, filed in the U.S. District Court of Northern California, alleges SMIC hired more than 100 TSMC employees and asked some of them to provide SMIC with TSMC's trade secrets. TSMC is seeking a permanent injunction and monetary damages.

In other semiconductor IPO news, Atheros Communications has priced its upcoming IPO at $14 per share. Previously, the Sunnyvale, Calif., company, which specializes in Wi-Fi chips, expected the range to be between $9.50 and $11.50 per share.

The company's shares will trade under the "ATHR" symbol on the NASDAQ National Market. Atheros expects to raise more than $100 million in the offering.



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