Semiconductor equipment costs 100 million US dollars per unit! How to reduce the financial burden on Chinese chip companies? Shanghai boldly explores pilot enterprises | Integrated Circuit | China
On June 28th, the Shanghai Financial Leasing Service Integrated Circuit Industry Laboratory, jointly established by Bank of Communications Financial Leasing Co., Ltd., CMB Financial Leasing Co., Ltd., and Puyin Financial Leasing Co., Ltd., was unveiled in the Lingang New Area of the Shanghai Free Trade Zone. The laboratory will pilot the "Financial Leasing SPV Integrated Circuit Equipment Leasing Business", and at the unveiling ceremony, the first batch of business cooperation agreements will be signed nationwide.
In this pilot project, the Shanghai Banking and Insurance Regulatory Bureau supports three leasing companies to establish SPVs in the Lingang New Area and engage in business cooperation with high-quality integrated circuit enterprises such as Shanghai Litong Semiconductor and Geke Micro Co., Ltd. Through asset circulation, risk isolation, import tax burden reduction, and capital cost reduction, it provides more in-depth and comprehensive financial support and services for the sustainable development of integrated circuit enterprises.
Wu Jiong, Vice President of Puyin Financial Leasing, introduced that science and technology innovation enterprises need growth oriented and long-term financial support that covers the entire life cycle of the enterprise, and the characteristics of financial leasing are longer terms and more flexible scheme design. Science and technology innovation enterprises generally cannot provide fixed assets such as land and factories as collateral, and financial leasing has both financing and material properties.
"Financial leasing is very suitable for the needs of our integrated circuit enterprises." Zhao Lixin, Chairman of Geke Micro Co., Ltd., introduced that integrated circuit design enterprises are mostly light assets in the initial stage, but in the process of developing towards high-end and innovative processes, they need special manufacturing equipment, which is bound to develop towards heavy assets. But high-end equipment is very expensive. Taking lithography machines as an example, the cheapest ones cost 10 million US dollars, and some devices even cost 100 million US dollars per unit, causing a significant financial burden for enterprises. But this type of equipment is more cost-effective and suitable for leasing.
Zhao Lixin revealed that Gekewei may have a significant breakthrough in core components by the end of this year, and will require more equipment afterwards, estimated to require 1-2 billion US dollars. "Even through stock market financing, the pressure is too great, so we urgently hope to have financial leasing support and operate in a partially self owned and partially leased model in the future."
The reporter learned that the integrated circuit industry, as one of the key 100 billion level industries in the new Lingang District, has gathered 230 related enterprises, signed projects with a total investment scale of nearly 300 billion yuan, and fixed assets investment of more than 120 billion yuan. It has built a whole industrial chain integrating design, high-end manufacturing, equipment materials, advanced sealing and testing, and chip trade.
Yin Jun, Deputy Director of the Financial and Trade Department of the Lingang New Area Management Committee, told reporters that the SPV business in China's financial leasing industry is mainly concentrated in the fields of aircraft, ships, marine engineering, etc. This pilot business represents the first expansion of the SPV leasing scope in Shanghai Lingang, and is also aimed at better serving the development of the integrated circuit industry in the new area.
"The 'sandbox supervision' model adopted this time is to conduct risk assessment and strengthen communication with regulatory authorities during the pilot process of individual cases, without changing the existing relevant regulations on financial leasing. Yin Jun said, 'When the time is ripe, integrated circuit financial leasing may be included in the regulatory scope, which is expected to empower integrated circuit enterprises nationwide.'"