On October 23, Huacan Optoelectronics announced its strategic plan to leverage the existing technological and production advantages of its wholly-owned subsidiary, Huacan Optoelectronics (Suzhou) Co., Ltd. This initiative aims to enhance the company's scale efficiency, reduce manufacturing costs, and ensure a more reliable supply of materials, ultimately safeguarding the interests of its shareholders. The company has unveiled a four-phase project in Zhangjiagang City, Jiangsu Province, focused on the production of LED epitaxial wafers and chips.
The first phase of the fourth stage involves constructing various supporting facilities, including an epitaxial plant, chip plant, power station, and ammonia supply station, with a total construction area of 116,118.72 square meters. Additionally, the company plans to renovate the existing 1# epitaxial plant and 2# chip plant, covering approximately 6,500 square meters, and purchase new production equipment. Upon completion, the facility is expected to produce 9 million LED epitaxial wafers (2-inch film, for internal use) and various types of LED chips annually. The investment for this phase amounts to 20.5 billion yuan, which includes 2.9 billion yuan for construction, 32.5 million yuan for working capital, and 82.3 million yuan for interest during the construction period.
As part of the project, the Suzhou Subsidiary is expected to receive government subsidies for fixed asset investments, up to 400 million yuan, as well as research and development funding and loan interest subsidies, totaling no more than 300 million yuan from 2017 to 2021. The project is designed to fully utilize the Suzhou subsidiary’s current strengths, align with the company’s expansion goals, and reinforce economies of scale, further lowering costs and improving material supply reliability.
In a separate announcement on the same day, Huacan Optoelectronics revealed its intention to inject 500 million yuan in its own funds into the Suzhou Subsidiary. After this capital increase, the subsidiary's registered capital will reach 1.1 billion yuan, with the parent company retaining full ownership. This move is intended to strengthen the subsidiary’s financial position and support the ongoing development of the LED epitaxial wafer and chip project. It also aligns with the company’s long-term growth strategy.
Huacan Optoelectronics Suzhou Subsidiary specializes in the design, manufacturing, and sale of semiconductor materials and devices, electronic components, and lighting equipment. It also engages in import and export activities, subject to national regulations. Recent financial data for the subsidiary shows strong performance, supporting its continued growth and expansion.
This strategic investment underscores Huacan Optoelectronics’ commitment to innovation, efficiency, and sustainable development in the semiconductor and optoelectronics industries.
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