Huahong Hongli (01347) entered into a joint venture investment agreement and joint shareholder agreement to enhance the company's competitiveness and market position in the global and mainland Chinese foundry industry

Zhitong Finance App News, Huahong Hongli (01347) announced that the Company, Huahong Hongli Shanghai, Wuxi Entity II, Huaxin Fund, CDB and Wuxi Joint Venture III entered into a joint venture investment agreement on September 1, 2026. The Company, Huahong Hongli Shanghai, Wuxi Entity II, Huaxin Fund and CDI agreed (including) to invest US$1,042.5 million, US$1,084.2 million, US$834.0 million, US$625.558 million and US$625.58 million respectively in cash million dollars.

According to the joint venture investment agreement, Wuxi Joint Venture III will establish a 12-inch wafer production line with a monthly production capacity of about 55,000 wafers.

Regarding the joint venture investment agreement, the joint venture shareholders will also enter into the new articles of association of the Wuxi Joint Venture III to reflect the terms of the joint venture agreement.

On the same day, the Company, Huahong Hongli Shanghai, Wuxi Entity II, Huaxin Fund, CDB Entity and Wuxi Joint Venture III signed a joint shareholder agreement. According to the terms set forth in the joint venture shareholder agreement, shares relating to the Wuxi Joint Venture III held by CDB are subject to the right of redemption granted by Huahong Hongli Shanghai to the CDB entity.

After completion of the proposed transaction under the joint venture investment agreement and the joint shareholder agreement, Wuxi Joint Venture III will hold approximately 51% of the Group's rights, of which 25% will be directly held by the Company and 26% will be held indirectly by the Company through its wholly-owned subsidiary Huahong Hongli Shanghai.

The Company has entered into joint venture investment agreements and joint shareholder agreements to enhance the company's competitiveness and market position in the global and mainland Chinese foundry industry, strengthen the company's R&D capabilities, and enrich its process platform products, thereby providing customers with more competitive wafer products to meet the needs of various emerging semiconductor terminal applications.

Wuxi Joint Venture III will be the project company responsible for the construction and operation of the third 12-inch foundry production line. The joint venture investment agreement and the joint shareholder agreement set out the investment requirements for the conversion of a joint venture III into a joint venture in Wuxi City.