SMEC Establishes Subsidiary “ChipLink Power”, with Investment from 5 Prominent New Energy Firms

On August 30th, SMEC (Semiconductor Manufacturing Electronics Corporation), a leading domestic company in the core chip and module industry for new energy vehicles, announced its plan to establish a holding subsidiary and engage in related transactions. They intend to collaborate with affiliated parties, as well as SAIC Motor Corporation Limited, XPeng Motors, CATL (Contemporary Amperex Technology Co., Ltd.), Luxshare Precision Industry Co., Ltd., Sungrow Power Supply Co., Ltd., and other well-known automotive and energy enterprises along with their subordinate industrial investment institutions. Together, they will contribute 500 million yuan (approximatly $68.6 million) to establish ChipLink Power Technology (Shaoxing) Co., Ltd.

According to the information, ChipLink Power plans to have a registered capital of 500 million yuan ($68.6 million). Among them, SMEC accounts for 51.00% of the registered capital. The remaining planned shareholders include several equity investment institutions such as SAIC Motor Corporation, XPeng Motors, CATL, Luxshare Precision Industry, and Sungrow, along with their subsidiary industrial investment institutions in the new energy sector including automotive and energy industries.

SMEC’s semi-annual report for 2023 shows that the company is the largest and technologically most advanced IGBT production base in China. Currently, it holds the top position in terms of IGBT shipments as well as auto-grade SiCMOSFET shipments. The automotive business has witnessed a year-on-year revenue growth of 510.67%, directly driving over 60% growth in the company’s main operations. This achievement has made Zhongxin Integrated the leading domestic contract manufacturer with the highest growth rate in mainland China during the first half of 2023, covering more than 90% of new energy vehicle end customers with auto-grade products.

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At present, the domestic SiC market is highly competitive, with main applications focused on areas such as new energy vehicles, wind and solar energy storage, and smart grids. There is a high concentration of customers in this market. In the investment announcement, SMEC mentioned that under the promotion of the wave of semiconductor localization in China, the SiC industry has grown into an important investment sector worth billions of dollars. The establishment of ChipLink Power together aims to cooperate with SMEC’s development strategy and business needs, promote vertical integration within the company’s industry, achieve a complete industrial chain layout.

ChipLink Power plans to mainly engage in process research and development, production and sales of wide bandgap semiconductors such as SiC. Leveraging SMEC’s advantages accumulated over many years in terms of resources, experience, customers etc., ChipLink Power will utilize its strong presence in the high-penetration market layout for new energy industries to continuously collaborate with customers on developing advanced technologies and products. This will contribute to achieving synergistic development across the entire semiconductor industry chain.