① Zhaoyi Innovation plans to spend 1.5 billion yuan to once again participate in Changxin Technology's capital increase to speed up the company's production capacity layout; ② Throughout 2023, Zhaoyi Innovation will spend 405 million yuan and 362 million yuan respectively to purchase Changxin Storage's DRAM products and OEM DRAM products.
Financial Services Association, March 28 (Reporter Wu Xin) After 2020, Zhaoyi Innovation (603986.SH) plans to once again participate in Changxin Technology's capital increase to accelerate the company's production capacity layout.
According to the announcement, the current capital increase of GigaYi Innovation is 1.5 billion yuan, and the price of participating in the capital increase is 2.61 yuan/yuan of registered capital. Prior to this round of capital increase, Zhaoyi Innovation held about 0.95% of Changxin Technology's shares; after the capital increase is completed, Zhaoyi Innovation will hold about 1.88% of Changxin Technology's shares.
According to information, Changxin Technology is mainly engaged in the production, R&D, design, and sales of integrated circuits and related products. Changxin Technology's pre-investment valuation of this round of financing is approximately RMB 139.882 billion. The financing proceeds will be used to promote DRAM (dynamic random access memory chips) and other related businesses, supplement working capital, repay loans from financial institutions, and equity investments in participating holding subsidiaries.
Zhaoyi Innovation has invested in Changxin Technology twice. Because of its close cooperation with Changxin Storage, a wholly-owned subsidiary of Changxin Technology, Changxin Storage provided it with DRAM products and OEM services. According to information, GigaYi's innovative DRAM products can currently be used in smart homes, industry, and automotive AV systems.
After reviewing the relevant reports, the reporter found that throughout 2023, Zhaoyi Innovation spent 405 million yuan and 362 million yuan respectively to purchase DRAM products from Changxin Storage and DRAM products manufactured on its OEM basis. In the first half of 2024, Zhaoyi Innovation expects to purchase 384 million yuan of OEM DRAM products from Changxin Storage.
Notably, the semiconductor market recovered slowly over the past year, and demand in the DRAM market was light. The World Semiconductor Trade Statistics Organization predicts that in 2023, the global semiconductor market size will decrease 10.3% year over year to $515 billion. Also, according to TrendForce data, the global DRAM market is expected to reach US$59.6 billion in 2023, a decrease of 28% over the previous year.
In 2023, GigaYi Innovation expects to achieve revenue of 5.766 billion yuan, a year-on-year decrease of 29.08%; it is expected to achieve net profit of 155 million yuan, a year-on-year decrease of 92.45%. Under such circumstances, the company invested 1.5 billion yuan in Changxin Technology, and whether it can achieve the expected return remains to be considered. Zhaoyi Innovation also said that Changxin Technology “is uncertain in its business development due to factors such as R&D progress, market environment, and macroeconomic policies.”