BYD Semiconductor Terminates IPO Application for the Fourth Time

On the evening of November 15, BYD announced that it will terminate the promotion of its holding subsidiary BYD Semiconductor Company Limited (hereinafter referred to as "BYD Semiconductor") of the spin-off listing, and will subsequently start the spin-off listing work at an opportune time.

In response, BYD responded to the media that the withdrawal was a prudent decision based on the judgment of the market situation, the urgency of the project construction, and other factors to make full justification.

As for the termination of the IPO again, BYD explained in the announcement that the decision was mainly due to the fact that the company's assets and business structure would be greatly adjusted next.

With the rapid rise in sales of domestic electric vehicle industry, the application of automotive grade semiconductors is constrained by the upstream wafer production capacity, and the lack of cores has not yet been fully alleviated. In this regard, BYD said in the announcement, in order to expand the wafer production capacity, during the IPO material review, the company invested in the implementation of the Jinan power semiconductor production capacity construction project, this project has been successfully put into operation, the production capacity climbing situation is good.

However, subsequent to the face of industry growth, in order to enhance the capacity supply capacity and independent controllability as soon as possible, BYD Semiconductor said that it will also continue to carry out large-scale wafer capacity investment and construction on the basis of the Jinan project.

Since the launch of its IPO in December 2020, BYD Semiconductor's road to IPO has had many twists and turns. In the past two years, the company has twice terminated its IPO process due to "expired financial information in its application documents" and the fact that the law firm it accepted was investigated by the Securities and Futures Commission.

BYD Semiconductor was first established in 2002 as the IC design division of BYD, and then entered the microelectronics and optoelectronics fields in 2004. BYD's previously disclosed prospectus shows that BYD Semiconductor mainly focuses on the business of power semiconductors, in addition to intelligent control ICs, optoelectronic semiconductors, sensors.

Before the listing, BYD Semiconductor also frantically absorbed food and ammunition and introduced a lot of external funds. In 2020, BYD received an investment of 1.9 billion yuan before listing, with a pre-investment valuation of 7.5 billion yuan, introducing a number of institutions such as Sequoia, Xiaomi Yangtze River Industry Fund and CICC Capital.

Under the background of chip localization substitution and soaring domestic auto sales, BYD Semiconductor was once called the "first stock of car core" and entered the supply chain of many auto brands other than BYD.

The prospectus shows that from 2018 to 2021, BYD Semiconductor will achieve operating revenues of 1.34 billion yuan, 1.09 billion yuan and 1.44 billion yuan. Industry data also shows that the domestic new energy passenger car motor drive controller with IGBT modules, BYD Semiconductor's market share in the past two years reached 19%, second only to Infineon.

What can be predicted is that, no matter how difficult the process is, BYD Semiconductor will not give up the homeward journey of hitting the market again - because only by going public, BYD can also focus more on its automotive business and no longer need to blood the semiconductor division; and this semiconductor company can only get rid of the BYD Auto parent and expand new financing and customer channels out and become a truly independent domestic automotive chip company.

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