BYD halts spin-off and listing process for semiconductor unit

Shanghai (Gasgoo)- BYD Company Limited ("BYD") announced on Nov. 15 it has agreed for BYD Semiconductor Co., Ltd., ("BYD Semiconductor"), one of BYD's non-wholly owned subsidiaries, to terminate the spin-off and listing progress onto the ChiNext Board of the Shenzhen Stock Exchange, and withdraw the listing application materials.

In the latest announcement, BYD noted that the decision to stop advancing the spin-off and listing process for the semiconductor unit was made based on the consideration of industry development and strategic positioning of future business, as well as sufficient and prudent research, in order to speed up the construction of wafer production capacity, and make overall arrangements for business development and capital operation planning.

Photo credit: BYD

To be more specific, during the period of promoting the spin-off and listing process, NEV demands in China showed an explosive growth, which made wafer production capacity a bottleneck of the production capacity of automotive-grade power semiconductor modules. To expand its wafer production capacity, BYD Semiconductor has invested in the Jinan Power Semiconductor Production Capacity Construction Project, which has been put into operation. Nevertheless, the newly added wafer production capacity is still far from meeting the downstream demands amid the fast growth in NEV demands. Thus, apart from the Jinan Project, BYD will further increase investment in wafer supply capacity, which is likely to have a significant impact on the future assets and business structures of BYD Semiconductor.

The company added that it will resume the spin-off and listing of BYD Semiconductor as and when appropriate.

BYD stressed that the termination of the spin-off and listing will not have a material adverse effect on the existing operations, the business and financial position, and the future development strategies of the group.

BYD started planning out the spin-off and listing for BYD Semiconductor in 2020, but the process has been disrupted several times due to such factors as an investigation into the law firm advising on the deal and expired financial documents.