Du Yang of Xinxin Leasing: The total scale of the Guangdong-Macao semiconductor fund is expected to reach 20 billion yuan

According to Jiwei.com, "A new beginning, new challenges, core vitality and core vigor", the 24th China Integrated Circuit Manufacturing Annual Conference and Supply Chain Innovation and Development Conference 2021 will be held in Guangzhou from November 1st to 3rd. This summit forum will focus on the current global semiconductor industry situation and my country's industrial development status, and discuss strategic plans to use supply chain innovation to drive the linkage of all links in the upstream and downstream of the industrial chain.

At this summit forum, Du Yang, Chairman and President of Xinxin Financial Leasing Co., Ltd., delivered a keynote speech entitled "Promoting the Leapfrog Development of my country's Integrated Circuit Industry with Comprehensive Services Combining Industry and Finance". He pointed out that "the development of the industry requires diversified investment and financing methods, especially the integrated circuit industry, which not only needs its own equity capital, but also may need some special financing methods to support the development of this industry."

据了解，芯鑫租赁成立于2015年，是国内目前唯一专注于集成电路产业的融资租赁公司。公司由“大基金”牵头发起，股东单位由中芯国际、清华紫光、长电科技等半导体产业龙头以及浙江、深圳等各地国资等强强联合组成。公司先后为中芯国际、长江存储、紫光展锐、长电科技、中微半导体、沈阳拓荆等一批产业龙头企业和项目提供金融服务。

Du Yang said that as of now, the total asset scale of Xinxin Leasing is 60 billion yuan, and it is the only company that supports the development of the integrated circuit and semiconductor industries. In addition to financial leasing, we are also engaged in industrial funds, equity investment, overseas mergers and acquisitions and other businesses.

As an institution with a credit rating of 3A, Xinxin Leasing has successfully issued a variety of debt instruments such as corporate bonds, medium-term notes, short-term bonds, PPNs, etc. in recent years, and has been highly recognized by the financial market. The industries currently supported by the company cover the fields of manufacturing, packaging and testing, design and equipment from the perspective of integrated circuits. 

"Since the integrated circuit industry has long been plagued by the phenomenon of 'the boss eats meat, the second one drinks soup', and other followers are struggling to survive", TSMC's depreciation period is very short, it is depreciated in five years, but the domestic depreciation period is seven years. Therefore, we have created innovative tools for operating leases in the manufacturing industry. "Du Yang said, in simple terms, we have extended the depreciation period of core manufacturing equipment from 7 or 8 years to 18 years, and the depreciation period has been financially calculated and recognized by SEMI. Through this model, we have reached cooperation with SMIC and Yangtze Memory, and some of our businesses have also introduced the government, banks, and Xinxin Leasing to form a closed-loop model. While reducing corporate costs, we have also achieved a win-win situation.

It is well known in the industry that if IC design companies want to raise funds, traditional financial institutions will first look at whether they have fixed assets, then whether they have factories, and whether they have strong shareholder backgrounds. However, for IC design and equipment material companies, the above conditions are relatively harsh. "In response to this situation, we, together with Unisoc and Changdian Technology, have pioneered financing that is completely secured by IP independent intellectual property rights. It is best to do research and development of IP intellectual property rights. Design companies can also capitalize research and development expenses when they are listed on the Science and Technology Innovation Board, which can be said to kill two birds with one stone." Du Yang said that Xinxin Leasing has played the role of building a bridge between domestic equipment and upstream and downstream companies.

"Although the capital market is very enthusiastic about the integrated circuit industry, there is still a long way to go when it comes to real financing for enterprises."

In addition, Xinxin Leasing has currently established the Guangdong-Macao Semiconductor Fund in Hengqin, Zhuhai. Du Yang said, "We expect the total size of this fund to be 20 billion yuan, with 10 billion yuan in the first phase. Xinxin Leasing, under the leadership of the Zhuhai Municipal Party Committee and Municipal Government, and eight Zhuhai institutions have invested and jointly established the first phase of the fund with a size of between 4.5 billion and 5 billion yuan. Later, we hope to raise 5 billion yuan in funds in the Macao Special Administrative Region. At present, the Macao Finance and Economics Department and the Economic and Management Bureau have officially submitted the relevant documents today. This is the process of establishing the Guangdong-Macao Fund."

Du Yang said that Xinxin Leasing is not a company that only deals with debts. We actually have an asset management platform and have launched multiple funds in cooperation with governments in many places, with a management scale of about 20 billion. Although the fund size is still relatively small, the investment projects are quite distinctive. Through the combination of investment and loan, while entering the equity, Xinxin Leasing will cooperate to design some unique financing methods. This is the current situation of our entire industry and ecological chain.