SMIC's revenue last year was 12.39B yuan, a 30% increase. The company plans to acquire Hangzhou Zhonggui to fill the gap in the "wet process technology field."

On the evening of March 30, Micro-Mechanics Semiconductor Equipment (Shanghai) Co., Ltd. (688012, hereinafter referred to as “Micro-Mechanics”) disclosed its 2025 annual report. The report shows that in 2025, the company’s full-year operating revenue was RMB 12.39B, up 36.62% year over year. Net profit attributable to shareholders of listed companies reached RMB 2.11B, up 30.69% year over year. Non-recurring profit and loss (“non-excluding”) net profit was RMB 1.55B, up 11.64%. The company plans to distribute cash dividends of RMB 3.50 per 10 shares to all shareholders (including tax). It also plans to increase share capital by converting capital reserve funds to all shareholders at RMB 4.9 shares for every 10 shares.

Micro-Mechanics mainly engages in the R&D, production, and sales of semiconductor equipment. It sells etching equipment, thin-film equipment, and MOCVD equipment to downstream semiconductor product manufacturing companies such as integrated circuit manufacturers, LED epitaxial wafer manufacturers, advanced packaging manufacturers, and MEMS product makers, and provides accessories and services.

Micro-Mechanics stated that in 2025, sales of its etching equipment were approximately RMB 9.83B, up approximately 35.12%; sales of its LPCVD equipment were approximately RMB 506 million, up approximately 224.23%. The company’s high-end products targeting key etching processes in advanced logic and memory device manufacturing saw a significant increase in shipped volumes. In advanced logic devices and advanced memory devices, multiple key etching processes achieved large-scale mass production.

The announcement shows that Micro-Mechanics’ etching equipment business continues to play the role of the “keystone.” By the end of 2025, the global shipments of its etching equipment reaction chambers exceeded 6,800 units. Its application coverage spans various etching scenarios for 65nm to 3nm and even more advanced processes. In domestic major customer chip production lines, its market share continues to steadily increase.

It is worth noting that Micro-Mechanics’ self-developed CCP high-energy plasma etching equipment and ICP low-energy plasma etching equipment have already met coverage of over 95% of the demand across more than 300 etching applications. Among them, the 60:1 ultra-high aspect-ratio etching equipment enables stable, reliable large-scale production on memory production lines, making Micro-Mechanics one of only a very small number of suppliers in China that can comprehensively cover all types of ultra-high aspect-ratio etching requirements in memory etching applications. In addition, the repeatability and matching accuracy of the ICP dual-tool system reach a picometer-level control standard, with core process metrics reaching new highs again; newly developed wafer-edge etching equipment and metal etchers have also smoothly entered customer production lines for validation.

Wafer fabrication equipment can be divided into categories such as etching, thin-film deposition, lithography, metrology, ion doping, and so on. Among them, etching equipment, thin-film deposition equipment, and lithography equipment are three core equipment types in the front-end process steps of integrated circuit production, with a large number of process steps and significant challenges in process development. According to Gartner’s year-by-year statistics, global etching equipment and thin-film deposition equipment account for approximately 22% and 23% of wafer fabrication equipment value, respectively.

The announcement shows that Micro-Mechanics’ thin-film deposition equipment business saw explosive growth in 2025. Full-year revenue increased year over year by approximately 224.23%, becoming an important new engine driving Micro-Mechanics’ performance growth.

Micro-Mechanics’ chairman Yin Zhiyao once said, “If a semiconductor equipment company only develops etching equipment and does not have thin-film equipment, its development space will be limited.”

In recent years, Micro-Mechanics has treated the development and introduction of various thin-film deposition equipment to the market as a key focus. With an industry-leading R&D speed, it successfully developed a dozen-plus core equipment types for conductive and dielectric thin films within a short period of time, and multiple products achieved breakthroughs in both technology and the market.

Micro-Mechanics continues to further intensify R&D investment. The report shows that in 2025, Micro-Mechanics’ R&D expenditure reached RMB 3.74B, up 52.8% year over year. R&D spending accounted for more than 30% of operating revenue, far higher than the average level of 10% to 15% for companies listed on the STAR Market. High-intensity R&D investment has driven a significant improvement in product iteration speed, shortening the development cycle for new equipment from the traditional 3 to 5 years to within 2 years.

According to disclosure, Micro-Mechanics is currently advancing R&D work for six categories and more than 20 new equipment types, covering next-generation CCP high-energy plasma etching equipment, ICP low-energy plasma etching equipment, wafer-edge etching equipment, LPCVD and ALD thin-film equipment, silicon and germanium silicon epitaxy EPI equipment, next-generation PECVD equipment using new plasma sources, CuBS PVD ultra-multi-reactor integrated equipment, electron-beam metrology equipment, large flat-panel equipment, and multiple new MOCVD equipment types, among others.

On March 30, Micro-Mechanics officially disclosed the “Report on the Purchase of Assets by Issuing Shares and Paying Cash and Raising Supporting Funds (Draft)” . Micro-Mechanics plans to purchase, through issuing shares and paying cash, a total of 64.69% of the equity interest in Hangzhou Zhongxing Silicon held by 41 counterparties, including Hangzhou Zhongxing Silicon, Ningrong Haichuan, Lin’an Zhongxing Silicon, Lin’an Zhonggu Silicon, Hangzhou Xinjiang Semiconductor, Hangzhou Zhongcheng Xin, and others, and to raise supporting funds. The total equity transaction amount is RMB 1.57 billion, and the amount to raise is RMB 1.5 billion.

This is Micro-Mechanics’ first time, over more than two decades since its establishment, to implement a controlling-share acquisition through share issuance, and it is also the first case among listed semiconductor equipment companies to acquire assets via share issuance since the issuance of policies such as the “8 Measures of the STAR Market” and the “6 Measures on M&A.”

As a leading player in dry-process equipment such as plasma etching and thin-film deposition equipment in China, Micro-Mechanics has already achieved mass production in the 65nm to 3nm and more advanced process fields. However, in wet-process technology, especially in chemical mechanical polishing (CMP) equipment—an essential front-end core process that is, together with etching and thin-film, also considered one of the front-end core processes—Micro-Mechanics had previously been blank.

Hangzhou Zhongxing Silicon is precisely the key piece that fills this gap. As one of the few companies in China that masters the core technology of 12-inch advanced CMP equipment and has achieved mass production, Hangzhou Zhongxing Silicon was founded in 2018 by Dr. Gu Haiyang, a senior expert in the CMP equipment field. Its pioneering 6-disk design significantly improves the equipment’s output efficiency. Its capacity (WPH) can better meet downstream customers’ needs.

Through this transaction, Micro-Mechanics will become a manufacturer equipped with four major front-end core process capabilities: “etching + thin-film deposition + metrology + wet processing,” achieving a key leap from a “dry-process” overall solution to a “dry + wet” integrated solution. This means Micro-Mechanics can provide customers with more highly coordinated and more systematized complete equipment solutions, is expected to shorten customers’ process tuning and validation cycles, strengthen customer stickiness, and accelerate the large-scale penetration of domestically made equipment into mainstream production lines.

In addition, the announcement also mentions that Micro-Mechanics will help Hangzhou Zhongxing Silicon reduce procurement costs for key components and overall operating costs by integrating procurement needs, sharing supplier resource, and deploying an independently developed management software platform, thereby achieving efficiency improvements across the entire chain from R&D to delivery.

At the close on March 30, Micro-Mechanics reported RMB 316.74 per share, up 3.64%.

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