Top Chinese chip maker Semiconductor Manufacturing International (SMIC) plans to raise 20 billion yuan (US$2.8 billion) on the mainland’s Nasdaq-style Star Market as the US moves to make life more difficult for its rival’s technology companies.

The Hong Kong-listed company, which withdrew its American depositary receipts (ADRs) from the New York Stock Exchange a year ago, said in a listing prospectus it would use the proceeds from what would be the Star Market’s biggest offering to date to develop its latest 12-inch SN1 chip and replenish capital.

“The Star Market is now playing its role as a strategic fundraising platform to bolster the country’s own technology companies as the US-China relationship worsens,” said Zhou Ling, a fund manager with Shanghai Shiva Investment.

SMIC is the mainland’s dominant semiconductor foundry and a key chip maker that Beijing is looking to support as the US administration moves to curb China’s rise in the technology industry.

In mid May, the company received US$2.25 billion of investments from a clutch of Chinese state investors, that will be used to fund expansion of a facility in Shanghai.

The plant’s capacity of 6,000 14-nanometre wafers a month will be increased to 35,000, SMIC said.

The US Department of Commerce took drastic action last month to stifle China’s hopes of becoming a world-beater in the tech field.

Measures included a new law stating chip makers using semiconductor manufacturing equipment produced by American companies are barred from supplying chips to Chinese smartphone maker Huawei Technologies.

SMIC said the US rule posed a potential risk to its business as it would reduce its output and sales.

The company, established in 2003, is a rival to Taiwan Semiconductor Manufacturing Company (TSMC). It is lagging behind TSMC in terms of technological development and production capabilities.