Hua Hong Grace Semiconductor (01347) has signed a joint investment agreement and a joint shareholders agreement to enhance the company's competitiveness and market position in the global and mainland Chinese wafer foundry industry.

Hua Hong Grace Semiconductor (01347) announced that the company, Hua Hong Grace Semiconductor Shanghai, Wuxi Entity II, Hua Xin Fund, National Development Entity, and Wuxi Joint Venture III entered into a joint investment agreement on September 1, 2026. The company, Hua Hong Grace Semiconductor Shanghai, Wuxi Entity II, Hua Xin Fund, and National Development Entity agreed to invest a total of $1,042.5 million, $1,084.2 million, $834.0 million, $625.5 million, and $583.8 million in cash, respectively, into Wuxi Joint Venture III. According to the joint investment agreement, Wuxi Joint Venture III will establish a 12-inch wafer production line with a monthly capacity of approximately 55,000 wafers. Regarding the joint investment agreement, the joint venture shareholders will also establish a new set of organizational articles for Wuxi Joint Venture III to reflect the terms agreed upon in the joint investment agreement. On the same day, the company, Hua Hong Grace Semiconductor Shanghai, Wuxi Entity II, Hua Xin Fund, National Development Entity, and Wuxi Joint Venture III entered into a joint shareholder agreement. According to the terms of the joint shareholder agreement, the relevant shares of Wuxi Joint Venture III held by National Development Entity are subject to the redemption rights granted by Hua Hong Grace Semiconductor Shanghai. After the completion of the transactions proposed under the joint investment agreement and the joint shareholder agreement, Wuxi Joint Venture III will be approximately 51% owned by the Group, with 25% held directly by the company and 26% held indirectly by the company through its wholly-owned subsidiary, Hua Hong Grace Semiconductor Shanghai. The company's entry into the joint investment agreement and joint shareholder agreement aims to enhance its competitiveness and market position in the global and Mainland China wafer foundry industry, strengthen its R&D capabilities, and enrich its process platform products, thereby providing customers with more competitive wafer products to meet the demands of various emerging semiconductor terminal applications. Wuxi Joint Venture III will act as the project company responsible for the construction and operation of the third 12-inch wafer foundry production line. The joint investment agreement and the joint shareholder agreement specify the investment requirements for Wuxi Joint Venture III to transition into a joint venture.