BOE Technology Group (000725.SZ), a major player in the display and electronics industry, has announced plans to spearhead a substantial investment in a new 12-inch integrated circuit production line. This initiative involves a collaboration with multiple partners and aims to boost China's semiconductor manufacturing capabilities, supporting the growing demand in display and integrated circuits.

BOE, through its wholly-owned subsidiary Tianjin BOE Innovation Investment Co., Ltd., will work alongside Beijing Yandong Microelectronics Technology Co., Ltd. (Yandong Technology), Beijing Yizhuang Technology Co., Ltd., and several other investors to inject capital into Beijing Electronic Control Integrated Circuit Manufacturing Co., Ltd. (Beidian Integration). The project will require a total investment of 33 billion yuan (approximately $4.55 billion), with 31.5 billion yuan allocated for construction costs and 1.5 billion yuan set aside for working capital.

The project's registered capital is 20 billion yuan, with Yandong Technology contributing 4.99 billion yuan (24.95% ownership), Tianjin BOE Venture Capital providing 2 billion yuan (10% ownership), and other investors making up the remaining contributions. Any gaps between the investment and the registered capital will be addressed through loans.

Scheduled to begin in 2024, the project aims to start installing equipment by the fourth quarter of 2025, with mass production expected by the end of 2026. By 2030, the facility is projected to reach a monthly capacity of 50,000 wafers. The focus will be on manufacturing chips for display drivers, analog-digital mixed circuits, and embedded MCUs, catering to markets such as AIoT, automotive electronics, communications, and ultra-high-definition displays.

Yandong Technology will take the lead in controlling Beidian Integration, forming a strategic alliance with Tianjin BOE Venture Capital, Yizhuang National Investment, and Beijing State-owned Capital Operation Management. The project will leverage Yandong Technology's existing expertise, developing a comprehensive technology platform using both in-house research and selectively acquired technologies. The production line will target 28nm to 55nm process nodes, establishing a unique IP platform for advanced semiconductor applications.

Yandong Technology currently operates several wafer production lines, including a 6-inch silicon wafer line, a 6-inch SiC wafer line, an 8-inch wafer line at the 110nm node, and a 12-inch line under construction for the 65nm node. These facilities focus on applications ranging from AIoT to renewable energy and automotive electronics.

This investment reflects BOE's commitment to enhancing its integrated circuit ecosystem while maintaining its leadership in the display sector. The project aligns with Beijing's strategic goal of building a robust semiconductor industry, integrating display technology with chip manufacturing to drive sustainable development. However, the investment is still pending approval from the Beijing State-owned Assets Supervision and Administration Commission and will require shareholder consent.