en.Wedoany.com Reported - China's Siling Integrated Circuit Manufacturing Co., Ltd. announced on the evening of June 23 an investment progress update, stating that the company has signed a "Capital Increase and Shareholders' Agreement" with China's Siling Advanced Integrated Circuit Manufacturing (Shaoxing) Co., Ltd. and China's Shaoxing Keqiao Xinhe Advanced Integrated Venture Capital Fund Partnership (Limited Partnership). The capital increase will be used for Siling's 12-inch automotive-grade digital-analog hybrid chip manufacturing project, with a total planned investment of approximately 20 billion yuan, implemented by Siling Advanced. Following the signing of the capital increase agreement, the automotive-grade chip manufacturing project has moved from preliminary framework arrangements to the capital increase implementation stage.
According to the agreement, the industrial fund plans to inject 2.004 billion yuan into Siling Advanced, while Siling Integrated plans to inject 662 million yuan into Siling Advanced. Upon completion of the capital increase, Siling Advanced's registered capital will increase to 2.675 billion yuan, with the industrial fund holding 74.90% and Siling Integrated holding 25.10%. The funds will be used for project construction, daily operations, and R&D and production of core businesses.
China's Siling Integrated previously disclosed that the project plans to build a 12-inch integrated circuit automotive-grade digital-analog hybrid chip production line with a capacity of 50,000 wafers per month. Key technologies and product directions include 40/28nm MCU/DSP, 90/55nm BCD/DrMOS analog circuits, and 55nm silicon photonics and laser driver chips. The total investment for the project is approximately 20 billion yuan, including 12 billion yuan in capital and 8 billion yuan in bank loans. Of the capital, Siling Integrated plans to contribute 3.012 billion yuan, local industrial funds and other joint investment entities plan to contribute 3 billion yuan, and other market-based funds plan to contribute 5.988 billion yuan.
The project is located in Shaoxing, Zhejiang Province, China. According to a June 11 announcement, China's Siling Integrated plans to cooperate with China's Zhejiang Shaoxing Hangshao Linkong Demonstration Zone Industrial Development Group Co., Ltd. to jointly operate Siling Advanced, which will undertake the construction of Phase IV of the project. The announcement shows that Siling Advanced was established in September 2023, with its registered address at Lianxing Village, Qianqing Street, Keqiao District, Shaoxing City, Zhejiang Province, China. Its business scope includes integrated circuit manufacturing, integrated circuit design, integrated circuit chip and product manufacturing, technical services, technology development, and technology transfer.
Siling Integrated stated that the project implementation will serve the high-end analog integrated circuit chip business, covering application demands such as AI computing servers, Automotive Industry" target="_blank">new energy vehicles, robotics, and optical interconnects. Automotive-grade chips require high manufacturing stability, reliability testing, and long-term supply capabilities. The construction of a 12-inch production line typically involves facilities, clean systems, key equipment, process platforms, customer validation, and production ramp-up. This capital increase agreement clarifies the equity structure and phased funding sources for Siling Advanced, providing a financial foundation for subsequent equipment introduction, production line construction, and product R&D and manufacturing.
The announcement also notes that the project construction period is relatively long and will not have a significant impact on the company's current performance. After the capital increase, Siling Integrated's stake in Siling Advanced will decrease from 100% to 25.1%. The company preliminarily determines that Siling Advanced will no longer be consolidated into its financial statements, and the long-term equity investment in Siling Advanced will be accounted for using the equity method. The initial project construction funds of 400 million yuan for Siling Advanced were primarily provided by Siling Integrated in the form of shareholder loans. Since Siling Advanced will no longer be consolidated, these funds will form passive external financial assistance, with a loan term generally not exceeding six months.
In its risk warnings, China's Siling Integrated stated that if significant changes occur in industry policies, market conditions, price fluctuations, or product technology iterations, the project's operational performance and profitability may fall short of expectations. If national or local policies are adjusted, project approvals or implementation conditions change, or the financing environment shifts, the project implementation may face delays or modifications. With the signing of this capital increase agreement, the 20 billion yuan 12-inch automotive-grade digital-analog hybrid chip manufacturing project has entered a more specific phase of fund allocation and construction advancement.
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