[Reporter Hong Youfang/Report from Hsinchu]KYEC (2449), a major semiconductor testing company, held a press conference today and announced that the board of directors has resolved to dispose of all 92.1619% of the shares indirectly held by Suzhou Jinglong in China. The board of directors also decided to withdraw from the Chinese semiconductor manufacturing business. In response to the strong demand for AI and HPC, it decided to increase its investment in high-end testing R&D and production expansion in Taiwan. This year’s capital expenditure increased from NT$7 billion to NT$12.281 billion, an increase of more than 75%.
KYEC stated that due to the impact of geopolitics on the global semiconductor industry supply chain, the impact of the United States’ restrictions on China’s semiconductor industry technology, the trade entity list, and the ban on certain products, the ecological environment of semiconductor manufacturing in China has changed, and the market has Competition is getting tougher. KYEC has fully considered the environment in which Suzhou Jinglong Technology has invested, as well as weighing KYEC’s future operational development and growth strategic plans and the long-term more effective use of financial resources. The board of directors has made a decision to withdraw from China’s semiconductor manufacturing business at this time.
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KYEC pointed out that due to the rapid development of science and technology, the complexity of specifications of terminal mobile devices, automobiles, Internet of Things, high-efficiency computing (HPC) and artificial intelligence (AI) software and hardware products has jumped. The quality of products of global major customers has changed and their needs have changed over time. In terms of its operational development strategy, KYEC will focus its resources on Taiwan’s semiconductor manufacturing supply chain, work closely with customers and suppliers, and strengthen testing services for fabless advanced process products and integrated device manufacturing (IDM) ) to increase outsourcing orders and create higher growth space for revenue and profits.
KYEC emphasized that after deducting relevant taxes and other effects from the sale of Jinglong’s long-term investment transaction, the net cash inflow will be approximately NT$16.6 billion. After the funds are repatriated to Taiwan, the funds will be used in addition to accelerating the construction of factory equipment and enriching working capital. , will invest in higher-end testing technology research and development and expand high-end testing equipment to respond to strong market demand for AI, HPC and other markets. KYEC’s board of directors has decided today to increase capital expenditures this year from NT$7 billion. to 12.281 billion yuan.
In addition, KYEC will also allocate approximately 3.668 billion yuan of funds obtained from the disposal of assets, and will add cash dividends of 1.5 yuan/share next year and the year after next to reward shareholders. In addition, it will not rule out cooperation with domestic and foreign listed companies. Strategic cooperation with downstream and industry peers to seek better global development opportunities for Taiwan’s semiconductor industry.
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Jinglong has contributed a lot to KYEC’s revenue and profits, estimated to be as high as 20 to 30%. Will selling it have an impact on KYEC’s operations? Can Taiwan’s short-term performance make up for it? Zhang Gaoxun, general manager of KYEC, pointed out that the sale is expected to be recognized in the third quarter. This year it will only affect the fourth quarter, but it will have almost no impact on the whole year. Next year, there will be proceeds from the sale and Taiwan’s investment in production expansion. limited. At the same time, the company continues to increase investment in Zhunan and Tongluo factories. It is estimated that the existing factories will soon be close to full capacity, and plans to start construction of the fourth factory in Tongluo. The company will also conduct an investment assessment of Taiwan plus one, but there is currently no specific plan. , this year’s capital expenditure is not used in Taiwan plus one.
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