by SHAO Yuting
China's FourSemi (03625.HK) has begun taking orders for its Hong Kong IPO this week, betting that rapid gains in the audio chip market can outweigh persistent losses and a patent dispute with a domestic rival.
The company is offering 12 million shares at HK$40 to HK$50 each, seeking to raise up to HK$600 million (about US$87 million). Shares are due to begin trading on March 31, following the close of the offering.
The listing comes as Awinic Technology (688798.SH) filed a patent infringement lawsuit against FourSemi earlier this month, with a hearing set for April 27. The case could weigh on investor sentiment during the IPO process if it raises concerns over the company's technology and compliance risks.
Founded in 2016, FourSemi is a fabless semiconductor company focused on audio power amplifier and haptic chips used in smartphones, wearables and other devices. Its customers include Samsung, Xiaomi, vivo and Honor, and it is positioning itself as a supplier for AI-driven audio and interaction technologies.
According to Frost & Sullivan, the company ranked fourth globally in audio amplifier chip revenue in 2024.
Fourier's growth has been driven by aggressive pricing. The average selling price of its low-power audio chips fell to 0.66 yuan in 2023 from 1.08 yuan a year earlier, compressing gross margins to 2.7% from 17%. Margins for mid- and high-power chips also declined.
Its pricing is significantly lower than peers such as Awinic Technology, underscoring a strategy of trading margins for volume to gain market share.
That approach has boosted shipments. Total audio amplifier chip shipments reached 460 million units in 2024, giving the company about 9.2% of the global market.
Revenue more than doubled to 355 million yuan in 2024, but FourSemi has yet to turn a profit, reporting losses for three consecutive years. Losses widened again in the first ten months of 2025, even as revenue continued to grow.
FourSemi said it expects to remain loss-making in the near term due to continued investment in research and development, which has accounted for more than half of operating expenses.
Its balance sheet shows mounting pressure. As of October 31, 2025, the company held 73.46 million yuan in cash, compared with 164 million yuan in current liabilities, including 80.54 million yuan in bank borrowings.
FourSemi also faces concentration risks. In the first ten months of 2025, its top five customers accounted for 78.6% of revenue, while its top five suppliers made up 97.8% of procurement, exposing it to shifts in demand and supply.
FourSemi is seeking to diversify into automotive chips, though revenue from the segment remains minimal.
Proceeds from the IPO will be used to fund research and development, expand testing capacity and pursue acquisitions.
The deal will test whether investors are willing to back a fast-growing but loss-making chipmaker navigating pricing pressure and legal risks.