SHANGHAI (Reuters) – U.S. curbs on Chinese tech firms amid the intensifying Sino-U.S. battle for tech supremacy are feeding an investment boom across China’s semiconductor industry, driving prices of both publicly traded and venture-backed companies into bubble territory.
Investors have pushed the share prices of the country’s 45 listed chipmakers to over 100 times the companies’ earnings, making semiconductors the priciest sector in the stock market.
There is also a scramble for pre-listing deals, as venture capitalists once focused on consumer internet companies turn their attention to chips. Such investment in the sector almost doubled to 22 billion yuan ($3.11 billion) in two years through 2019, showed data from Zero2IPO.
“It’s not just the government, it’s the private sector too – everyone in China is trying to invest in something related to semiconductors,” said Jin-biao Huang, co-founder of six-year-old Nuvolta, a maker of chips for wireless charging.
Many startups have