(Yicai) Nov. 11 -- Chinese e-commerce giant Alibaba Group Holding has announced that its chipmaking arm T-Head Semiconductor has successfully filed for a spin-off listing on the Hong Kong Stock Exchange.

T-Head submitted its listing application form to apply for an initial public offering on the Main Board of the HKEX on a confidential basis on Sept. 11, Alibaba said in an exchange filing yesterday, adding that T-Head will remain a subsidiary after the listing.

The spin-off will better reflect T-Head’s value on its own merits, enabling investors to appraise and assess its performance and potential separately from those of Alibaba, and attract investors seeking dedicated exposure to its business, the Hangzhou-based parent firm noted.

Moreover, the move is expected to enhance T-Head’s standalone profile among its customers, suppliers, and potential strategic partners, improving its commercial competitiveness, enable it to access both equity and debt capital markets on a standalone basis, and further enhance its ability to secure bank credit facilities, which will allow a more efficient deployment of Alibaba’s financial resources.

The fact that T-Head will remain under Alibaba after the IPO underscores its pivotal role in the parent company’s artificial intelligence roadmap. Its integrated “chip-cloud-model” is a key driver for Alibaba to enhance client efficiency and market competitiveness through its full-stack AI capabilities. However, greater scrutiny will fall on T-Head’s ability to monetize its technology commercially.

Founded in 2018 as Alibaba’s wholly-owned semiconductor arm, T-Head is the result of the merger between the chip research unit of Alibaba’s research institute DAMO Academy and C-Sky Microsystems, an integrated circuit design house bought by the company that year, to advance Alibaba’s end-to-end cloud-chip strategy.

Since March, Alibaba has been releasing information about T-Head’s progress, including that it had achieved mass production. Chief Executive Officer Eddie Wu said that more than 60 percent of T-Head’s chips deployed within Alibaba Cloud serve external clients, powering AI workloads for over 400 corporate customers.

Cumulative shipments of T-Head’s Zhenwu AI chip series had reached 560,000 units as of April.

Editor: Futura Costaglione