In the post Moore era, as the pace of pursuing high-precision process technology slowed down, advanced process research and development fell into a bottleneck period, and characteristic processes became another way to improve chip performance.

The chip manufacturers led by Huahong Semiconductor have been deeply engaged in the field of Foundry model of wafers with characteristic technology. Recently, two new messages have been sent from Huahong Semiconductor.

Signing of Huahong Wuxi Phase II Project

According to Xinhua Daily, the signing ceremony of the second phase project of Huahong Wuxi Integrated Circuit R&D and Manufacturing Base was held in Nanjing on June 8.

According to data, Huahong Semiconductor Manufacturing Wuxi Company (hereinafter referred to as "Huahong Manufacturing") was established in June 2022 with a registered capital of 6.68 million yuan. It is 100% owned by Huahong Hongli, a wholly-owned subsidiary of Huahong Semiconductor, and mainly engages in the manufacturing and sales of integrated circuits and 12 inch (300mm) wafers using 65/55nm to 40nm processes.

Huahong Semiconductor is a semiconductor chip foundry with 8 inch and 12 inch wafer factories. Its predecessor is Hua Hong Semiconductor NEC, a Sino Japanese joint venture founded in 1997. After equity restructuring, it was listed on the main board of the Hong Kong Stock Exchange in 2014.

Huahong Hongli is a world leading Foundry model enterprise with distinctive processes, and also a Foundry model enterprise with the most comprehensive coverage of distinctive process platforms in the industry. At present, Huahong Hongli has three 8-inch wafer factories and one 12 inch wafer factory.

According to the latest report of TrendForce Jibang Consulting, in the first quarter of 2023, HuaHong Group ranked the sixth in the world with a market share of 3.0% among the world's top ten foundry manufacturers.

Huahong Semiconductor's IPO registration application approved

At present, the global semiconductor industry is still in a downward cycle. For local wafer fabs, the difficulty of expanding production in the reverse cycle is not low. The first thing they need to face is a huge capital investment. Many manufacturers choose to list on the Science and Technology Innovation Board to solve their temporary financial problems, and Huahong Semiconductor is no exception.

Huahong Hongli is the main body of Huahong Semiconductor's A-share listing this time. Previously, on June 6th, the China Securities Regulatory Commission disclosed its approval for the registration of Huahong Hongli's initial public offering of shares and approved its application for IPO registration on the Science and Technology Innovation Board.

If Huahong Hongli is successfully listed on the Science and Technology Innovation Board, it will rank the third in terms of fundraising scale among the listed enterprises on the Science and Technology Innovation Board, second only to the listed Semiconductor Manufacturing International Corporation and BeiGene. This also means that the Science and Technology Innovation Board is about to welcome the third listed Foundry model enterprise this year.

The company plans to raise 18 billion yuan in this issuance, of which 12.5 billion yuan will be invested in the Huahong Manufacturing (Wuxi) project, accounting for 69.44% of the total planned fundraising. The 8-inch factory optimization and upgrading project, characteristic process technology innovation and research and development project, and supplementary working capital plan to use the raised funds of 2 billion yuan, 2.5 billion yuan, and 1 billion yuan, respectively, accounting for 11.11%, 13.89%, and 5.56% of the total planned fundraising.

Huahong Manufacturing is one of the implementing entities of Huahong Hongli's IPO investment project. The Huahong Manufacturing (Wuxi) project mainly aims to expand the 12 inch production line, which will start production in 2025. It is expected that the final production capacity will be 83000 pieces per month. The total investment of the project is 6.7 billion US dollars. In addition to the 12.5 billion yuan raised through the IPO, Huahong Manufacturing announced in February that it had completed a strategic financing of 4.02 billion US dollars and planned to use this strategic financing (approximately 60% of the total investment) to solve the remaining funding gap in advance.

This financing will be invested by Huahong Semiconductor, Huahong Hongli, Dafu Phase II, and Wuxi State owned Investment Company. The funds will mainly be used to expand wafer production capacity, strengthen its market position and competitiveness in various wafer fields.