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Source: HG Semiconductor Limited
HG Semiconductor Officially Commences Production of GaN Power Electronics Epitaxial Wafer
Realising GaN Business Production Capacity
Striving to Create New Profit Driver

HONG KONG, Nov 2, 2022 - (ACN Newswire) - HG Semiconductor Limited ("HG Semiconductor", together with its subsidiaries, "the Group"; stock code: 6908.HK) is pleased to announce that the Group has recently started manufacturing its own 6-inch gallium nitride ("GaN") power electronics epitaxial wafer (the "Wafer"). The successful manufacturing of the Wafer happens far earlier than the expected timetable and paves the way to the Group's quick industrialisation and mass production of GaN third-generation conductors, which represents a major achievement of the Group's business transformation into a supplier of third-generation semiconductor GaN, marking a milestone in the commercialisation of its third-generation semiconductor GaN business.

Leveraging its professional expertise, strong scientific team and research and development ("R&D") capabilities in third-generation semiconductor GaN manufacturing, HG Semiconductor has been on its path of strategic transformation in recent years. The Group's technical team has capitalised on their extensive experience to debug production facilities and technology in just three months, and successfully produced the Wafers that reach the high-yield standards of international manufacturers, and subsequently beginning sales of the Wafer. The Group expects to commence pilot production of chips in the second quarter of 2023, and commence mass production by early 2024. In addition, HG Semiconductor has also launched GaN-related fast charging products such as fast charging chargers since the second half of this year. The Group is of full confidence in the prospects of manufacturing and sales of GaN-related products.

In recent years, the development of the global semiconductor industry has undergone significant changes. With increasing uncertainty in the external environment, independence and self-control in developing the whole industrial chain is expected become the key development of the domestic semiconductor industry in the future. The report of the 20th National Congress of the Communist Party of China (CPC) also clearly pointed out that scientific and technological progress and professional talents are crucial to the future development of the country. The report implies that the Chinese government will invest a huge amount of financial resources in the technology industry, which in other words, that mainland China will increase its research expenditures on semiconductor technology and speed up the realisation of high-tech self-reliance. Alongside with the strong support from the Chinese national policies, the Hong Kong government will also allocate more resources in the R&D and manufacturing of third-generation semiconductors in the future. The Hong Kong Applied Science and Technology Research Institute (ASTRI) has proposed to invest additional resources to promote the development of national semiconductor industry, underlining the importance of the industry to regional economic development.

Third-generation semiconductor epitaxial wafers, being one of the core components in the semiconductor industry chain, are semi-finished product which are to be produced as chips through subsequent processing. The successful manufacturing of the Wafer represents a giant leap to HG Semiconductor in reaching its ultimate goal of mass chip production. The third-generation semiconductor epitaxial wafers are widely adopted in the fields of photovoltaics, energy storage, wind power, automotive electronics, 5G, Internet of Things (IoT) and other end-user applications. The rapid growth and robust market demand has led to further speed up the production of domestic epitaxial wafer production facilities, resulting in an optimistic expectation of a continued massive boom in the entire semiconductor epitaxial wafer industry. The market size of the GaN semiconductor epitaxial wafer reached US$420 million in 2021, and is projected to reach US$1.5 billion by 2028, with a compound annual growth rate (CAGR) of 21.2% from 2022 to 2028. With the favourable government policies, extensive downstream applications and domestic substitution acceleration, the Group will continue to spearhead its R&D and expand its design and manufacturing of third-generation semiconductor business and system applications, with a view to achieving breakthroughs in the domestic substitution technology in the future, thereby becoming a leading integrated device manufacturing ("IDM") enterprise covering full-chain operation including R&D, manufacturing, packaging, testing, and sales of semiconductors.

The management of the Group is confident in the development of its third-generation semiconductor business and believes that GaN has tremendous advantages in emerging applications such as new energy automotive industry. Currently, the Group's epitaxial wafer products have now officially entered full-scale production, together with the strong execution capability and rich experience in mass production of the Group's technical team, it is believed that the semiconductor chip business will gradually bear fruits. At earlier time, the Group formally entered into a shares subscription and warrants subscription agreement with Mr. Zhu Gongshan, the Founder, Chairman and Executive Director of GCL Technology Holdings Limited (Stock code: 3800.HK), and subsequently entered into a strategic cooperation framework agreement with GCL Group Limited, a discretionary trust of Mr. Zhu Gongshan and his family members as beneficiaries, under which both parties will cooperate closely in the application of GaN chips in the new energy sector and accelerate the deployment in the GaN industry chain. The management of the Group believes that the tremendous opportunities and market demand in the semiconductor industry will bring more opportunities to the Group. It is expected that the Group will embrace a high-growth period, striving to provide the best returns to its shareholders in the long run.

About HG Semiconductor Limited
HG Semiconductor Limited (6908.HK) is principally engaged in semiconductor product business in China, including the design, development, manufacturing, subcontracting services and sales of light-emitting diode ("LED") beads and a new generation of semiconductor gallium nitride ("GaN"). The Group is committed to accelerating its research and development and expansion in the application of GaN related products, with an aim to become a leading semiconductor company with the integration of design, manufacturing and sales of semiconductor chips, as well as providing total solutions with higher efficiency and competitive system cost.

For more details, please visit www.hg-semiconductor.com


Topic: Press release summary
Source: HG Semiconductor Limited

Sectors: Electronics
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