Silex Microsystems AB surged in its first day of trading on Nasdaq Stockholm after an initial public offering that raised about 2 billion Swedish kronor ($220 million) for the specialist microchip-maker and its Chinese shareholder Sai MicroElectronics Inc.
The debut marked the strongest open for a sizable European IPO in almost five years, after cornerstone investors took the majority of the shares in the offering and the deal was oversubscribed several times.
Trading was halted for volatility after shares traded as high as 210 kronor apiece, an increase of nearly 160% from its IPO price of 81 kronor per share. Cornerstone investors including Swedish pension funds and international firms bought about three-quarters of the shares being offered.
Silex operates the world's leading facility for manufacturing micro-electro-mechanical systems, or MEMS, components that combine mechanical elements with semiconductor-style circuitry, according to its prospectus. The chips are used in technology that powers mobile phone accelerometers, which enables motion tracking for fitness and screen orientation, and steers lasers for lidar systems in autonomous driving.
"It is an incredibly strong opening on the listing day," Joakim Bornold, founder of investment platform Levler, said. "There's red-hot investor appetite for the chipmaking industry and this shows there is capital and risk-taking if the investment case is strong enough."
Shares opened at 150 kronor apiece, 85% higher than the IPO price. That marks the biggest jump at the open for a European IPO raising more than $100 million since electric charging company CTEK AB listed in Stockholm in 2021, according to data compiled by Bloomberg.
Silex plans to use the proceeds of the offering to help expand in the US by acquiring a manufacturing facility in the country and allowing it to operate closer to its customers, the prospectus shows. Still, the firm's history as a Chinese-owned company and SMEI's continued minority stake could pose a risk to its plans to expand in the US, the document said. SMEI will retain about a 9.9% stake in Silex after the offering.
The debut serves as a broader test for IPO markets in Europe, which have slowed amid geopolitical tensions in the Middle East and investor caution around disruption linked to artificial intelligence.
"The share price reaction is amplified by the paucity of investment opportunities in Europe during a time of insatiable appetite for semiconductor plays," said Emmanuel Valavanis, an equity sales specialist at Forte Securities in London.
The timing coincides with renewed scrutiny of recent Stockholm listings, like Verisure Plc. The alarm company's shares have begun to recover after falling as much as 37% below their offer price in last year's IPO, which raised about €3.6 billion ($4.2 billion).
ABG Sundal Collier, SEB and Nordea arranged the offering. The company trades under the symbol SILEX in Stockholm.