The second phase of the Big Fund injects an additional 1.5 billion yuan, while Hu Silicon Industry boosts its investment in high-end semiconductor silicon wafer manufacturing by 8.25 billion yuan.

Recently, Shanghai Silicon Industry Group Co., Ltd. (hereinafter referred to as “Shanghai Silicon Industry”) announced the results of its private placement offering.

It was disclosed that as of February 17, 2022, the total number of A-shares issued by Hu Silicon Industry to specific investors in this offering was 240 million shares, at an issue price of RMB 20.83 per share, with total proceeds raised amounting to approximately RMB 5 billion.

The “national team” makes another move: the second phase of the Big Fund injects an additional 1.5 billion yuan.

Judging from the results of the private placement, the final list of subscribers includes 18 entities, among them the Second Phase of the National Integrated Circuit Industry Investment Fund (hereinafter referred to as “Big Fund II”), Taizhou Zhonggui Equity Investment, Nord Fund, Shangguo Investment Assets, Central Enterprise Rural Industry Investment, and UBS.

Among them, the second phase of the Big Fund received the largest number of shares—72.01 million shares—worth approximately 1.5 billion yuan, accounting for 30% of the total funds raised. With this, Hu Silicon Industry has secured strong support from the “national team.” It is reported that Hu Silicon Industry received investment from the first phase of the Big Fund right from its inception.

According to available data, Hu Si Industry was established through joint investment by Shanghai Guosheng Group, the First Phase of the Big Fund, and other investors. It is one of the largest and most technologically advanced semiconductor silicon wafer manufacturers in China, primarily engaged in the R&D, production, and sales of semiconductor silicon wafers. The company focuses on the development of the silicon materials industry and its ecosystem. It is also among the first companies to achieve large-scale sales of 300mm semiconductor silicon wafers and is known as China's largest silicon wafer manufacturer.

Prior to this issuance to specific investors, Hu Silicon Industry had no de facto controller or controlling shareholder. Shanghai Guosheng Group and the First Phase of the Big Fund were tied as the largest shareholders, each holding 22.865% of the shares. Following this issuance, Hu Silicon Industry will still have no de facto controller or controlling shareholder. The shares held by the First Phase of the Big Fund and Shanghai Guosheng Group—both previously tied as the largest shareholders—will be diluted to 20.84%. Meanwhile, the Second Phase of the Big Fund will enter the top ten shareholders of Hu Silicon Industry, holding a 2.65% stake.

Joining the expansion wave: an additional 8.25 billion yuan invested in high-end silicon wafers.

Amid the "chip shortage" wave, Hui Silicon Industry has also joined the massive wave of capacity expansion. In early 2021, Hui Silicon Industry announced a proposed private placement plan, stating that it intended to raise 5 billion yuan through the offering, with total investment reaching 8.25 billion yuan to boost R&D and manufacturing of high-end silicon wafers.

According to previous information, the fundraising investment projects of Hu Silicon Industry this time include a research and development and advanced manufacturing project for 300mm high-end silicon wafers used in integrated circuit manufacturing, a pilot-scale R&D project for 300mm high-end silicon-based materials, and the replenishment of working capital. The funds will be allocated primarily to the R&D and production of semiconductor silicon wafers, which are the company’s core business.

The entity responsible for implementing the R&D and advanced manufacturing project for 300mm high-end silicon wafers used in integrated circuit manufacturing is Shanghai Xinsheng, a wholly-owned subsidiary of the company. The total investment for the project amounts to 4.6 billion yuan. Upon completion of the project, Hui Silicon Industry will add a monthly production capacity of 300,000 300mm semiconductor silicon wafers suitable for advanced manufacturing processes.
The implementing entity for the construction of the 300mm high-end silicon-based material R&D pilot project is Xinao Technology, a subsidiary of Hu Silicon Industry Holding. The total investment in the project amounts to 2.144 billion yuan, and it will involve the construction of a facility capable of producing 400,000 300mm high-end silicon-based (SOI) wafers.

Huxi Industry stated that, through the implementation of this fundraising and investment project, the company will further enhance its technological capabilities and production scale for 300mm semiconductor silicon wafers applicable to advanced manufacturing processes, establish a supply capacity for high-end 300mm silicon-based materials, expand the company’s overall business scale, strengthen its technology development capabilities, improve the core competitiveness of its products, and promote the continuous enhancement of its scientific and technological innovation strength.

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