Hua Hong Semiconductor to acquire 12-inch wafer foundry, plans fundraising

Hua Hong Semiconductor Limited announced a conditional agreement on August 31, 2025, to acquire 97.4988% of a 12-inch integrated circuit wafer foundry from several vendors, including Huahong Group and China IC Fund II. The consideration will be partially settled by issuing new RMB shares at RMB43.34 per share and partially by cash. The final consideration and number of shares are subject to further negotiation and the appraised value of the target assets, expected by the end of 2025.

In conjunction with the acquisition, the company proposes a non-public issuance of RMB shares to raise supporting funds, targeting not more than 35 specific subscribers. The total funds raised will not exceed 100% of the acquisition's final total consideration, and the number of RMB shares issued will not exceed 30% of the total issued share capital post-acquisition. This issuance is contingent on the acquisition's completion, Shanghai Stock Exchange approval, and CSRC registration.

Given that Huahong Group and China IC Fund II are connected persons, the acquisition and potential participation in the RMB share issuance by connected persons constitute connected transactions. A Whitewash Waiver will be sought, requiring approval from independent shareholders at an extraordinary general meeting, which will also vote on the acquisition and fundraising. Trading in the company's RMB shares on the STAR Board has been suspended since August 18, 2025, with an application for resumption on September 1, 2025.