After nearly four years of signing the contract without substantial progress, BoMin Electronics terminates the 5 billion yuan investment project in Hefei.

Nearly four years after signing the relevant agreements, Bomind Electronics (603936) has decided to terminate an industrial base project with a total investment plan of 5 billion yuan.

According to a notice from Bomind Electronics on March 17, after negotiations with the Administrative Committee of Hefei Economic and Technological Development Zone (referred to as Hefei Economic Development Zone Management Committee), both parties decided to terminate the investment cooperation for the “Bomind IC Packaging Substrate Industrial Base Project” and deregister the wholly-owned subsidiary established for this purpose. This matter has been approved by the company’s board of directors and is yet to be submitted for shareholder meeting review.

The project can be traced back to May 2022. At that time, Bomind Electronics signed a strategic cooperation agreement with the Hefei Economic Development Zone Management Committee. In January 2023, the company further announced that it signed an “Investment Agreement” with the Hefei Economic Development Zone Management Committee, intending to invest in a ceramic substrate and IC packaging substrate industrial base project within the development zone, with a total investment amount of approximately 5 billion yuan. To promote the project’s implementation, the company established a wholly-owned subsidiary, Hefei Borui Zhixin Microelectronics Co., Ltd. (referred to as Borui Zhixin), in June 2023. The announcement stated that as of this termination, Borui Zhixin’s registered capital had not yet been paid in, and no actual business activities had commenced.

Regarding the reason for terminating the investment, Bomind Electronics stated in the announcement that since the signing of the investment agreement, the company and the Hefei Economic Development Zone Management Committee had conducted multiple rounds of communication regarding the project’s implementation. In recent years, significant changes have occurred in the macroeconomic trend, industry market situation, and financing environment, leading to increased uncertainty in related market sectors and heightened difficulty in managing project investment risks.

Meanwhile, the “Bomind Electronics New Generation Electronic Information Industry Investment Expansion Project (Phase I)” located in Meizhou is currently underway. This project has a total investment of 3 billion yuan, with its core factory expected to gradually enter trial production and capacity ramp-up phases by 2025, and is projected to reach a predetermined usable state by December 2026. The company stated that once fully operational, this project will have production capacity for high multilayer boards, HDI boards, special boards, and other high-end PCB products, capable of accommodating new order demand for the company over the next 2 to 3 years.

Based on the above situation, the company stated that after careful consideration, it decided to terminate this investment to avoid redundant fixed asset investments and improve asset utilization efficiency. According to the timeline disclosed in the announcement, the company initiated a feasibility study and analysis for terminating the investment in January 2026, sent a termination confirmation letter to the Hefei Economic Development Zone Management Committee on February 25, and received a confirmation reply from the other party on March 16.

Bomind Electronics indicated that this external investment project had not yet commenced substantial investment construction activities, had not incurred related investment expenditures, and had not created any creditor-debtor disputes. The termination of the investment and the deregistration of the subsidiary will not have a significant adverse impact on the company’s production operations and financial condition.

Despite the termination of the Hefei project, the company emphasized in the announcement that its layout in the semiconductor packaging materials sector has not been adjusted. The company stated that its core technology reserves for the ceramic substrate business are sufficient, and a ceramic substrate production base has been established in Shenzhen. Currently, the capacity for AMB ceramic substrates is 150,000 sheets/month, and for DPC ceramic substrates is 80,000 sheets/month, with successful bulk supply to customers, including leading companies in the third-generation semiconductor power module sector, overseas automotive supply chain companies, and domestic leading lidar manufacturers.