TCL Technology Completes Acquisition of Zhonghuan Electronics and Information Group

PVTIME - TCL Technology, a Chinese manufacturer of TVs and display panels,
announced yesterday that it has completed the acquisition of Zhonghuan
Electronics and Information Group for the price of 10.974 billion yuan.

previously reported,
TCL Technology (000100. SZ) announced on June 24 that its board of directors
had deliberated and approved the company’s participation in the bidding for
100% equity of Zhonghuan Electronics Information Group as the intended transferee.

Zhonghuan Electronics and Information Group’s core assets include two listed technology
companies on the Shenzhen Stock Exchange: Tianjin
Printronics Circuit Corp., a producer and developer of printed circuit boards,
and Tianjin Zhonghuan Semiconductor Co., a manufacturer of photovoltaic monocrystalline
silicon wafers and semiconductors.

advantages and development plan in semiconductor materials production are important
reasons why TCL Technology chose to acquire it. TCL Technology said in the announcement
that Zhonghuan’s commitment to independent innovation and the development of
semiconductors and new energy materials are in line with TCL's strategic
direction and industrial development outlook, making it a logical acquisition target
for TCL’s strategic advancement goals.

In the
field of semiconductor materials, the silicon wafer is a key material in the
manufacturing of semiconductor devices. According to SEMI statistics, more than
95% of semiconductor devices and more than 99% of integrated circuits in the
world use silicon as substrate material. According to CSCI, silicon
wafers are developing towards larger sizes in order to adapt to the progress of
the chip manufacturing process. The larger the silicon wafer size, the lower
the unit chip manufacturing cost, and the less silicon chips are wasted.

Currently, the 12-inch (diameter) M12 silicon wafer is the mainstream size
of the world, and its shipments account for about 63% of the total shipment of
silicon wafers, followed by the 8-inch wafer which accounts for about 26%. The 18-inch
silicon wafer is the next goal of silicon wafer development, but is not
expected to be ready for mass production until after 2020.

8-12 inch large-diameter silicon wafers are the breadwinners for
Zhonghuan's semiconductor business. At the end of 2017, Zhonghuan's 's
large-scale silicon wafer project for integrated circuits began. Last year, the
project was successfully put into operation. According to the 2019 financial
report, the project is estimated to generate 21.4 billion yuan in revenue in 2020.

Currently, Zhonghuan has three 8-12 inch silicon wafer and
12 inch test line projects for integrated circuits under construction and has
said that it hopes to become one of the leading semiconductor material suppliers
in the world within three to five year.