On December 4th, the "Science and Technology Innovation Board Daily" (Reporter Chen Junqing) recently, Sai Microelectronics Inc. stated on the investor interaction platform that, affected by external objective factors, the company intends to stop promoting the 12-inch MEMS manufacturing line project with a total investment of 5.1 billion in Hefei High-tech Zone. This news has attracted wide attention in the market.

Regarding the above situation, the reporter of the "Science and Technology Innovation Board Daily" called Sai Microelectronics Inc.'s securities department today (December 4th), and the staff conveyed to the reporter of the "Science and Technology Innovation Board Daily", "The project was initially signed as a memorandum of understanding, and there has been no actual construction and production, which does not affect the company." Regarding whether the project will restart in the future, the person said, "At present, there is no hope for any (restart project)."

Regarding the issues related to the project, the reporter of the "Science and Technology Innovation Board Daily" also called the Hefei High-tech Technology Industrial Development Zone Semiconductor Investment Promotion Center. However, as of the time of publication, no relevant response has been received.

▍The agreement on the Hefei project has been signed for over two and a half years now.

In terms of project details, in January 2022, Sai Microelectronics Inc. disclosed in an announcement that on January 1, 2022, the company and the Hefei High-tech Technology Industrial Development Zone Management Committee signed a "Cooperation Framework Agreement", planning to build a 12-inch MEMS production line with a designed capacity of 0.02 million wafers/month, expected to generate annual revenue of about 3 billion yuan after reaching full production. This agreement has been signed for over two and a half years now.

In terms of project investment, Sai Microelectronics Inc.'s Hefei project company is planned to have a registered capital of 4 billion yuan, with Sai Microelectronics Inc. planning to contribute about 1.44 billion yuan, holding approximately 36% of the shares; the Hefei High-tech Zone Management Committee and affiliated state-owned platforms under the municipal and district governments planning to contribute about 1 billion yuan, holding approximately 24% of the shares; the project's core team planning to contribute about 0.4 billion yuan, holding approximately 10% of the shares; and other social capital planning to contribute about 1.2 billion yuan, jointly holding approximately 30% of the shares.

The "Science and Technology Innovation Board Daily" reporter noticed that apart from the manufacturing line project in Hefei, Sai Microelectronics Inc. is also building MEMS wafer pilot production lines and research platforms in Huairou, Beijing, and Shenzhen.

Specifically, on April 10 this year, Sai Microelectronics and the Huairou District People's Government of Beijing signed a "Global Strategy Cooperation Agreement" on April 10, 2024, planning to build a high-level 6/8-inch MEMS wafer trial production line and research platform in the Science City Industrial Transformation Demonstration Zone to provide research and development support for the design, manufacturing, testing, and other aspects of MEMS sensors, driving the aggregation and development of the MEMS sensor industry in the Huairou District.

On August 2, 2023, Sai Microelectronics announced that the company and its wholly-owned subsidiary, Sai Lex International, intend to sign an "Investment Agreement" with related parties of Shenzhen Investment Group, Yuan Zhi Xing Huo, Hua Da Song He, Coleinte, and Sai Lai Chuangjing to jointly invest in establishing Sai Lex Shenzhen.

It is reported that the company's registered capital is 1.5 billion yuan, with the company's wholly-owned subsidiary Sai Lex International contributing 0.45 billion yuan, holding 30% equity.

Sai Microelectronics stated that the purpose of this investment in establishing Sai Lex Shenzhen and investing in MEMS projects in Shenzhen is to fully utilize the advantageous resources of the South China Greater Bay Area concept, actively seize the opportunities for semiconductor and smart sensor industry development, have Shenzhen production line complement the Beijing production line effectively, and better satisfy the demand for MEMS process manufacturing from customers in different regions and industries at a more extensive and multi-level scale.

Regarding the construction status of the two production lines mentioned above, the securities department staff said to the "Star Daily": "The company's Beijing and Shenzhen production lines are both in the construction phase."

The company's first and second largest shareholders have successively reduced their shareholdings within the year.

The "Star Daily" reporter noticed that since the beginning of this year, Sai Microelectronics' first and second largest shareholders have been competing to announce their shareholding reduction plans.

On the evening of December 3, Sai Microelectronics announced that the National Integrated Circuit Industry Investment Fund Co., Ltd. (referred to as the 'Da Fund') has cumulatively reduced 8.7246 million shares of the company's stock through centralized bidding and block trading from November 7 to December 2, 2024, accounting for 1.19% of the company's current total share capital. After this equity change, Da Fund's shareholding percentage decreased from 10.0452% to 8.87%.

Regarding this, a person from the investor relations department of Sai Microelectronics Inc. told the journalist of 'Star Daily' that 'the major fund's reduction of holding is a normal phenomenon in the four stages of fund-raising return, with the purpose of realizing profits.'

It is understood that on October 16 this year, Sai Microelectronics received a notice of the share reduction plan issued by the major fund. The reduction plan will reduce the total share capital of the company by 1.5% within three months after fifteen trading days from October 16. This includes reducing no more than 1% of the total share capital through concentrated bidding and no more than 0.5% through block trade.

In addition to the major fund, Yang Yunchun, the actual controller of Sai Microelectronics and the company's largest shareholder, also has multiple share reduction plans.

According to the announcement on November 7 from Sai Microelectronics, the company's controlling shareholder and actual controller Yang Yunchun plans to reduce no more than 0.80% of the total share capital through concentrated bidding. The reason for the reduction is to repay the remaining debt of stock pledge. Yang Yunchun holds 0.184 billion shares of the company, accounting for 25.18% of the total share capital, of which 91.85 million shares are already pledged.

In addition, Yang Yunchun has had two share reduction plans between 2021 and 2023.

On October 27, 2021, Yang Yunchun announced a reduction of no more than 3% of the company's shares through concentrated bidding and block trades. The reduction was completed on February 17, 2022, totaling 11,690,316 shares of the company, accounting for 1.5942% of the total share capital.

After the completion of the reduction on February 17, 2022, Yang Yunchun announced a new reduction plan, reducing no more than 14,665,781 shares of the company through block trade, i.e., no more than 2% of the total share capital. This reduction plan terminated on April 25, 2023, reducing a total of 1.6786% of the total share capital.

Regarding the impact of the reduction on the company, the aforementioned person from the securities department of Sai Microelectronics stated that 'the major shareholder’s concentrated sale of shares will put pressure on the stock price. In the short term, there will be few corresponding investments to buy, the stock price will decline to a certain extent, and the overall impact is within a controllable range.'

As of today's close on December 4th, the stock price of Sai Microelectronics Inc. fell by 4.72%, closing at 20.19 yuan per share.