SMIC announces acquisition of Hangzhou Zhonggui to strengthen wet process equipment

（Source: SEMI）

On March 30, MicroPort announced in an evening release that it plans to purchase, by issuing shares and paying cash, 64.69% of the equity in Hangzhou Zhonggu Silicon held in total by 41 counterparties, including Hangzhou Zhongxin Silicon, Ningrong Haichuan, Lin’an Zhonggu Silicon, Lin’an Zhonggu, Hangzhou Xinjiang, and Hangzhou Zhongcheng Silicon. According to the equity valuation results, the consideration for this transaction is approximately 1.576 billion yuan.

At the same time, MicroPort plans to raise supporting funds of no more than 1.5 billion yuan, which will be used for high-end semiconductor equipment industrialization projects, high-end semiconductor equipment R&D center projects, payment of cash consideration and intermediary agency fees, and supplementing working capital.

The announcement shows that the target company, Hangzhou Zhonggu Silicon, is principally engaged in the R&D, production, and sales of chemical mechanical planarization (CMP) equipment. It is a core wet-process core equipment, and provides customers with overall solution packages for CMP equipment. It is one of the few companies in China that masters the core technology of 12-inch high-end CMP equipment and achieves mass production.

Through this transaction, MicroPort will become a manufacturer with four major front-end core process capabilities: “etching + thin-film deposition + metrology + wet process.” It will successfully achieve the key leap from “dry process” to an overall solution of “dry + wet process.” This integration not only fills the company’s gap in the wet-process equipment field, but also significantly enhances its capability to provide system-level overall solution packages for customers in advanced processes.

This move is intended to enhance the company’s capability to provide system-level overall solution packages for customers in advanced processes through “platform-based” operations. By providing customers with highly coordinated complete sets of equipment solutions, it will significantly shorten the process debugging and verification cycle, thereby increasing customer stickiness and accelerating large-scale penetration of the listed company into mainstream production lines.

MicroPort said that through this transaction, both parties will form significant strategic synergies. At the same time, it also marks a key step for the listed company toward “group-based” and “platform-based” development. It is consistent with the company’s strategic plan to continuously expand the integrated circuit coverage area by combining endogenous development with external acquisitions, and to provide customers with more competitive complete process solution packages. This transaction is expected to gradually increase the profitability of the listed company and bolster the listed company’s earnings per share.

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