On March 11, Silan Microelectronics (Silan Micro) issued an announcement on the progress of external investments. The company, together with Xiamen Semiconductor Investment Group Co., Ltd., Xiamen Xinyi Technology Industrial Co., Ltd. and relevant new investors, jointly signed the Supplementary Agreement on Investment Cooperation for the 12-inch High-end Analog Integrated Circuit Chip Manufacturing Line Project.
According to the announcement, under the agreement, Xiamen Haixia Liantou Investment Partnership (Limited Partnership) will succeed the original investor Xiamen Semiconductor Investment Group Co., Ltd. in performing its capital contribution obligation of 1.5 billion RMB for capital increase and share expansion in the project company Xiamen Silan Jihua Microelectronics Co., Ltd. (“Silan Jihua”), as well as all rights and obligations under the original Investment Cooperation Agreement.
Meanwhile, Xiamen Xinyi Xincheng Investment Partnership (Limited Partnership) and Xiamen Chuantou Xinhua Technology Investment Partnership (Limited Partnership) will each succeed part of Xiamen Xinyi Technology’s capital contribution obligation of 1.05 billion RMB (totaling 2.1 billion RMB) for capital increase and share expansion in Silan Jihua, and assume the rights and obligations of Xiamen Xinyi Technology under the original agreement in proportion to their respective capital contributions.
All the aforementioned new investors are special-purpose investment partnerships recently established in Xiamen. Their partners mainly include local state-owned capital and industrial investment entities such as Xiamen Semiconductor Investment Group, Xiamen Industrial Investment Co., Ltd., and Xiamen Advanced Manufacturing Equity Investment Fund.
Upon completion of the capital increase, the registered capital of Silan Jihua will be increased to 5.11 billion RMB.Among them: Silan Micro and its wholly-owned subsidiary Xiamen Silan Microelectronics Co., Ltd. will jointly subscribe 1.51 billion RMB, accounting for 29.55% of shares; Haixia Liantou will subscribe 1.5 billion RMB, accounting for 29.35%; Xinyi Xincheng and Chuantou Xinhua will each subscribe 1.05 billion RMB, holding 20.55% respectively.
Notably, under the original investment cooperation agreement, Silan Jihua will further introduce other investors in the future. After the planned capital increase, the registered capital will be raised to 6.01 billion RMB, and Silan Micro’s shareholding ratio will be further adjusted to 25.12%.
After the completion of this investment, Silan Micro’s shareholding in Silan Jihua will be reduced from the current 100% to 29.55%. The company will no longer consolidate Silan Jihua into its financial statements. Instead, it will account for the investment using the equity method and recognize investment income based on the 29.55% shareholding ratio.
Silan Micro stated that introducing new investors and optimizing the ownership structure will help accelerate the construction and operation of the 12-inch high-end analog integrated circuit chip manufacturing line project, fully leverage the company’s long-established unique advantages in the Integrated Design and Manufacturing (IDM) model, and continuously enhance comprehensive capabilities, in line with the company’s long-term development strategy.
The company added that the investment will help improve its strategic layout in high-end analog integrated circuit chips and strengthen core competitiveness. It will also enable the company to seize opportunities emerging from new industries including new energy vehicles, computing servers, and robots, promoting the sustained growth of its main business.Given the long construction period, this investment will have no significant impact on the company’s current-period performance.
(Reprinted from https://news.eccn.com/）