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National Silicon Industry Group (NSIG) [SHA: 688126], one of China’s leading silicon wafer suppliers, announced plans to invest CNY13.2 billion (USD1.8 billion) to expand production amid signs of a pickup in demand within the semiconductor industry.

To double its capacity for producing 300-millimeter silicon wafers to 1.2 million units per month, the Shanghai-based company will invest CNY9.1 billion (USD1.3 billion) in upgrading a plant in Taiyuan and CNY4.1 billion in revamping a factory in its home city, according to the announcement.

The Taiyuan project will be jointly funded by NSIG and two state-owned institutional investors: the second phase of China Integrated Circuit Industry Investment Fund and Fenshui Capital Management. NSIG stated in a separate announcement that the trio will establish a joint venture with CNY5.5 billion in registered capital, with NSIG holding 51 percent, the IC investment fund 27 percent, and Fenshui Capital 22 percent.

The global chip industry has been in a slump since last year due to overcapacity, which has impacted NSIG’s earnings.   Net profit plummeted 43 percent to CNY187 million (USD25.8 million) in 2023, while revenue decreased by 11 percent to CNY3.2 billion. In the first quarter of this year, the firm reported a net loss of CNY198 million after revenue fell by 10 percent to CNY725 million.

However, there are signs that the worst may be over. One of NSIG’s major clients, Semiconductor Manufacturing International, reported a 20 percent increase in revenue to USD1.8 billion for the three months ending March 31, which also represented a 4 percent gain over the prior quarter. As global customers begin to restock, the chipmaker anticipates revenue could rise by 5 percent to 7 percent this quarter compared to the last.

Editor：Lulu

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