In a significant development in the semiconductor industry, Huahai Qingke has announced its intention to fully acquire Xinyu Company, which will become a wholly-owned subsidiary upon completion of the transactionThis strategic move will lead to an increased investment in ion implantation machinery, a critical area in semiconductor manufacturing.

Recently, Huahai Qingke announced through a public statement that its wholly-owned subsidiary, Huahai Qingke (Shanghai) Semiconductor Co., Ltd., plans to invest no more than 1 billion Yuan (about 10.045 million dollars) to acquire the remaining 82% equity stake of Xinyu Company (Shanghai) Co., Ltd.

As a result of this acquisition, Xinyu Company is set to operate as a wholly-owned subsidiary of Huahai Qingke, allowing for a greater focus on the ion implantation machine business which is crucial for semiconductor production.

A spokesperson from Huahai Qingke mentioned that this acquisition serves as a “horizontal expansion” strategy, expected to bolster the overall scale and strength of the company’s business

Furthermore, the confidence in Xinyu Company's operations is based on an assessment of existing orders, customer demand, and broader industry trends.

Behind the acquisition, Xinyu Company boasts investors with prestigious backgrounds, including subsidiaries of leading chip manufacturers like Weir HoldingsNotably, despite the promising market outlook, Xinyu Company is currently operating at a loss and is expected to continue this trend in the short termThe acquisition also includes performance commitments regarding specific financial metrics.

The sellers of the equity include a mix of private individuals and various investment partnerships, including Shanghai Kaicheng Semiconductor Technology Partnership and others

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The collective stakes and beneficial interests of these parties illustrate the depth of investment interest in this segment of the semiconductor market.

It is noteworthy that the total price for acquiring 100% of Xinyu Company is set at approximately 1.23 billion Yuan, which reflects a staggering value increase of approximately 1541.43% compared to the book value of the company's equity at the assessment cutoff date.

Financial data from last year reveals that Xinyu Company recorded an annual revenue of just 3.62 million Yuan, incurring losses of around 24.42 million YuanAs of the audit benchmark date, the ion implantation equipment produced by the company has not yet generated income, as it is still undergoing client validation.

The investors behind Huahai Qingke's acquisition are distinguished, including state-backed entities and investment firms associated with national chip manufacturing initiatives, indicating strong institutional support and faith in the potential of the domestic semiconductor sector.

Huahai Qingke has articulated that Xinyu Company’s core focus is on R&D, production, and sales of integrated circuit ion implantation machines, particularly emphasizing the commercial viability of low-energy, large-beam ion implantation equipment, which is already being validated by clients

The firm's core team has over 30 years of experience in the ion implantation industry, providing a solid foundation for innovation and quality.

Ion implantation equipment plays an essential role in semiconductor manufacturing, accounting for approximately 3-5% of overall semiconductor processing equipment salesHowever, the field requires advanced knowledge across multiple scientific disciplines, which makes it highly technical and challenging to integrate such systemsStatistics from SEMI reveal that over 90% of implantation equipment is still sourced from American suppliers, indicating a massive gap in local production capability that Xinyu Company aims to fill.

As a leading Chinese developer of ion implantation equipment, Xinyu Company is among the few local firms capable of producing large beam ion implantation systems

Their superior equipment quality is evidenced by better contamination control for wafer particles and improved wafer handling efficiency compared to competing productsMoreover, a high percentage of their components are now domestically sourced, boosting local industry capabilities.

Huahai Qingke stands out as a high-end semiconductor equipment supplier, dedicated to research, production, and sales of specialized semiconductor gear, covering a broad range of products and servicesThis acquisition is set to significantly accelerate their development in the ion implantation segment, marking a central advance in their strategic vision of integrating equipment development with service offerings.

The proactive positioning of Huahai Qingke in the ion implantation market is a clear indication of its long-term strategy