KYEC sells its mainland factory, increasing Taiwan’s exit from mainland semiconductor manufacturing business | Industry Hotspots | Industry

KYEC (2449), a major testing company, considers the impact of geopolitical risks such as the U.S.-China technology war. Zhao Jingyao, deputy general manager and chief financial officer of KYEC, announced at a major news briefing yesterday (26th) that it will purchase approximately RMB 4.885 billion ( Approximately NT$21.7 billion) sold approximately 92% of its shares in Suzhou Jinglong Technology in mainland China. It is expected to complete the transaction before the end of the third quarter and exit the mainland semiconductor manufacturing business.

KYEC’s board of directors simultaneously approved an increase in capital expenditures in Taiwan this year from 7 billion yuan to 12.281 billion yuan, an increase of more than 70%; the profits from the sale of the business will be allocated to an additional cash dividend of 1.5 yuan in 2025 and 2026.

According to data, approximately 90% of Jinglong Technology’s revenue comes from local customers in mainland China. KYEC transferred the equity of Jinglong Technology to China Suzhou Industrial Park Industrial Investment Fund, China Packaging and Testing Factory Tongfu Microelectronics, Suzhou Xinrui Equity Investment Partnership, Shanghai State-owned Assets and State-owned Enterprise Comprehensive Reform Experiment Private Equity Fund Partnership and other companies. This time The estimated disposal proceeds from the sale are approximately 3.827 billion yuan, which will contribute approximately 3.13 yuan to KYEC’s net earnings per share and increase the net value per share by approximately 3.23 yuan.

Zhao Jingyao further said that in order to give back to shareholders and share investment results with shareholders, the funds obtained from this disposal will be allocated approximately 3.668 billion yuan, with an additional cash dividend of 1.5 yuan per share in 2025 and 2026.

Zhao Jingyao said that in recent years, geopolitics has had an impact on the global semiconductor supply chain. Coupled with the impact of the United States’ technological restrictions on mainland China’s semiconductor industry, the trade entity list, and the ban on the sale of some products, the ecological environment of semiconductor manufacturing in mainland China has changed, and market competition has As the situation becomes increasingly severe, the board of directors has made a decision to withdraw from the mainland semiconductor manufacturing business after fully considering the environment in which Jinglong Technology operates, and weighing strategic planning for future operational development and growth and effective use of financial resources.

The long-term investment transaction amount of KYEC’s sale, after deducting relevant taxes and other effects, has a net cash inflow of approximately NT$16.6 billion. After the funds are repatriated to Taiwan, they will be used in addition to accelerating the construction of factory equipment and enriching working capital. Higher-end testing technology research and development and expansion of high-end testing equipment.

Suzhou Jinglong Technology was established in September 2002 with a paid-in capital of US$18.168 million (approximately NT$590 million). It is mainly engaged in the processing and assembly of analog or hybrid automatic data processor components, solid-state memory system components, and heating oven processing and assembly. and sales business, as well as integrated circuit packaging and testing. The legal person pointed out that Jinglong Technology’s main business is wafer testing of 5G chips and CMOS image sensing components.