SMIC's IPO was a flop during its first day of trading, felling 11 percent in New York and 8 percent in Hong Kong. The shares were expected to increase 20 percent on its opening day.

Although the largest foundry in China, analysts said that SMIC faces more competition down the road from companies like TSMC and United Microelectronics whom are ramping up operations here to take a bigger pie of the China's 36 billions chip market.  

Also contributing to the drop is that the reports indicating many of the company's core middle managers might leave SMIC after reaping the gains of the offering. That concern had been expressed before by key high-level management.

The poor performance of SMIC's offering indicate that the next followers may have to work harder to convince investors of their competitive edge.

By: DocMemory
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