Silan Microelectronics, a major Chinese power semiconductor manufacturer, announced on November 25 that the completion dates for two of its major investment projects will be delayed until December 2026. The projects in question are the “Annual Production of 360,000 12-inch Chip Production Line” and the “Automotive Semiconductor Packaging Project (Phase 1).”

Project Delays and Reasons

Originally, the “360,000 12-inch Chip Production Line” was scheduled to reach its designated usable state by December 2024, while the Automotive Semiconductor Packaging Project (Phase 1) was expected to be ready by September 2025. The delay of the chip production line by two years came as a surprise to many.

According to the company's announcement, the delay was due to several factors, including the timing of project funding, industry development, market competition, and the construction progress of integrated device manufacturing (IDM) companies. Silan Microelectronics explained that these large-scale projects require significant investment and are critical to the company's strategic expansion in the high-end power semiconductor sector.

The company further stated that the decision to extend the completion date is a prudent move, taking into account current market conditions, actual construction progress, and the need to adjust product technology and production capacity to meet external changes. Silan emphasized that while the completion dates for these projects will be extended, the overall project scale, investment amounts, and the entities responsible for the projects will remain unchanged. The delay is aimed at better controlling investment risks and ensuring the successful implementation of the projects.

Funding and Investment Details

Silan Microelectronics also revealed that it had raised approximately 4.91 billion RMB from a special stock issuance earlier this year. The company issued 248 million shares at 20 RMB per share, with the net proceeds of 4.91 billion RMB intended to fund the two delayed projects. The funds have been deposited into a dedicated account managed by the lead underwriter, CITIC Securities, as of November 14, 2023.

As of September 30, 2024, a total of 5.36 million RMB of the company’s own funds had been invested in the 12-inch chip production line, which has now been revised to a total investment of 1.6 billion RMB. Meanwhile, the Automotive Semiconductor Packaging Project (Phase 1) remains on track with an investment commitment of 1.1 billion RMB, of which 487.1 million RMB has already been invested.

A Strategic Move for the Future

Silan Microelectronics noted that despite the delays, these investments are a key part of the company’s long-term growth strategy in the high-end semiconductor sector. The extension of the project timelines allows the company to optimize its resources and respond flexibly to changing market conditions. The company remains committed to achieving its strategic goals, which include addressing the evolving demands of the power semiconductor market, while ensuring that the projects’ scale, execution plans, and investment allocations remain unchanged.

While the delay of these projects may have come as a setback, the company’s decision reflects its cautious and strategic approach to ensure the long-term success of these important ventures.