Wanye Enterprise announced to join hands with the Institute of Microelectronics of the Chinese Academy of Sciences to promote its strategic transformation

Wanye Enterprise is further promoting its strategic transformation. Recently, Wanye Enterprise announced that it will establish an integrated circuit equipment group in a joint venture with the Institute of Microelectronics of the Chinese Academy of Sciences, with a total investment of 1.5 billion yuan.

Leading the establishment of the Integrated Circuit Equipment Group

On June 24, Wanye Enterprise issued an announcement on the signing of a memorandum of cooperation on the joint venture to establish an integrated circuit equipment group. The announcement showed that the company signed a "Memorandum of Cooperation on the Joint Venture to Establish an Integrated Circuit Equipment Group" with the Institute of Microelectronics of the Chinese Academy of Sciences (hereinafter referred to as "IMES") and Xinxin Financial Leasing Co., Ltd. (hereinafter referred to as "Xinxin Leasing").

The announcement stated that the company and the Institute of Microelectronics plan to jointly initiate the establishment of Integrated Circuit Equipment Group Co., Ltd. (hereinafter referred to as the "Equipment Group"). The total investment of the project is 1.5 billion yuan, of which the Institute of Microelectronics and Wanye Enterprise will jointly invest 800 million yuan. Xinxin Leasing plans to provide an indicative financing amount of 500 million yuan for the Equipment Group, and the specific decision-making and approval results will be subject to the final approval.

It was disclosed that the main business areas of the equipment group are the research and development, manufacturing and sales of integrated circuit industry equipment and pan-semiconductor industry equipment. It will focus on key equipment for front-end manufacturing and back-end packaging of integrated circuits, and provide customers with complete sets of equipment and process solutions by providing service capabilities in component manufacturing, integrated circuit equipment design and manufacturing, and optimization of key processes in integrated circuit manufacturing.

According to the information, the Institute of Microelectronics is a national research institution specializing in research and development in the field of microelectronics. It is the supporting unit of the Microelectronics Technology Center of the Chinese Academy of Sciences and the EDA Center of the Chinese Academy of Sciences. Its predecessor, the former 109th Factory of the Chinese Academy of Sciences, was established in 1958. In 1986, the 109th Factory and the Institute of Semiconductors and the Institute of Computing Technology of the Chinese Academy of Sciences, which were related to the development of large-scale integrated circuits, were merged into the Microelectronics Center of the Chinese Academy of Sciences. In 2003, it was officially renamed the Institute of Microelectronics of the Chinese Academy of Sciences.

Founded in 2015, Xinxin Leasing is a financial leasing company focusing on the integrated circuit industry, led by the National Integrated Circuit Industry Investment Fund (referred to as the "Big Fund") and jointly established by leading industry companies, with a registered capital of 10.65 billion yuan. According to its official website, Xinxin Leasing's total assets reached 45 billion yuan in three years since its establishment, of which about 70% were invested in the integrated circuit semiconductor field.

In this cooperation, Xinxin Leasing, as a professional financial leasing company in the integrated circuit industry initiated and established by the Big Fund, will leverage its professional advantages and business network in the field of integrated circuit equipment financial leasing, form a strategic partnership with the equipment group, and provide the equipment group with an intended financing amount of 500 million yuan through various models such as financial leasing and factoring.

The Institute of Microelectronics and Wanye Enterprise plan to use the equity of their respective holdings in integrated circuit equipment companies as capital contribution. The equity valuation will refer to the valuation method of integrated circuit equipment companies that the National Integrated Circuit Industry Investment Fund (hereinafter referred to as the "Big Fund") has invested in, and a third-party agency will be hired to issue an evaluation report.

After the signing of this memorandum, the parties will designate personnel to form a preparatory group and elect a leader and deputy leader of the preparatory group; the preparatory group will be responsible for selecting the location of the equipment group and other preliminary work for the establishment of the equipment group, and will complete the preparatory work before December 30, 2019.

Strategic transformation: Acquisition of Kaishitong and introduction of large funds

Regarding the cooperation with the Institute of Microelectronics and Xinxin Leasing, Wanye Enterprise said that this is in line with the company's established strategic transformation direction. Utilizing the R&D resources of the Institute of Microelectronics in the field of integrated circuits and the industrial and financing resources of Xinxin Leasing has practical significance for the company's strategic transformation to the integrated circuit industry.

According to the data, Wanye Enterprise was formerly known as "Zhongcheng Industrial" and "COSCO Development". It was established in October 1991 and listed on the Shanghai Stock Exchange in April 1993. Its main business at this stage is real estate development and sales. In 2015, Shanghai Pudong Science and Technology Investment Co., Ltd. (hereinafter referred to as "Puke Investment") took over Wanye Enterprise and became its controlling shareholder (holding 28.16%) in 2018, actively promoting its strategic transformation.

Wanye Enterprise has set its transformation goal on the integrated circuit equipment and materials industry. In 2017, after deliberation and approval by the board of directors and shareholders' meeting, Wanye Enterprise subscribed 20% of the first phase of Shanghai Semiconductor Equipment and Materials Industry Investment Fund with 1 billion yuan of its own funds, taking the first step in its transformation. The fund was jointly funded by the Big Fund, Lingang Management Committee, Guosheng Group and other units, and is an important part of Shanghai's 50 billion yuan integrated circuit industry fund.

In July 2018, Wanye Enterprise initiated the acquisition of 100% equity of Shanghai Kaishitong Semiconductor Co., Ltd. (hereinafter referred to as "Kaishitong"), and finally successfully completed the acquisition of 100% equity of Kaishitong at a price of 398 million yuan in cash. After the acquisition of Kaishitong, Wanye Enterprise officially entered the field of ion implantation machines, one of the core equipment industries of integrated circuits, and its transformation took a substantial step forward.

In addition, in July 2018, Sanlin Wanye, the former second largest shareholder of Wanye Enterprise, transferred its 7% stake in Wanye Enterprise to the Big Fund for RMB 677 million through an agreement transfer, making the Big Fund the third largest shareholder of Wanye Enterprise. Wanye Enterprise officially became a member of the integrated circuit "national team".

Now, Wanye Enterprise has joined hands with the Institute of Microelectronics and Xinxin Leasing (Big Fund) to build an integrated circuit equipment group, which will further deepen its strategic transformation to the integrated circuit equipment and materials industry. The announcement stated that the cooperation between the three parties is conducive to bringing together the professional advantages of their respective fields, promoting the integration of "scientific research, finance, and industry" in the integrated circuit equipment industry, and promoting the improvement of the domestic substitution level of integrated circuit equipment.

An industry insider said that Wanye Enterprise's move is undoubtedly to further strengthen its layout in the semiconductor field. The cooperation with the Institute of Microelectronics is also expected to enable more research results to be industrialized. The subsequent development remains to be seen.