The A-share market is witnessing a notable uptick in mergers and acquisitions within the semiconductor sector, with several companies venturing into this field as they strive to establish a "second growth curve." The semiconductor industry, being the backbone of modern technology, finds its applications proliferating across diverse sectorsAs emerging technologies continue to evolve, the demand for semiconductors is on the riseRecognizing the importance of nurturing local industries, the Chinese government has ramped up its emphasis on promoting domestic innovation, resulting in a slew of policies aimed at bolstering research and development investments within the semiconductor supply chain.

Several factors have contributed to this revitalization, including national policy support, growth in market demand, and industry consolidation and innovationThe establishment of the third phase of the National Big Fund, with a scale surpassing the combined total of the previous two phases, provides substantial financial backing to the semiconductor industry

In a recent gathering convened by the Shanghai Stock Exchange, stakeholders in integrated circuit companies collaborated to push forward the implementation of the "8 Guidelines for Sci-tech Innovation Board." During the first half of the year, five A-share semiconductor companies reported projected net profit increases exceeding 100% for the period, indicating a robust recovery in the global semiconductor sectorTSMC's plans to increase prices, with 3nm foundry price hikes expected to exceed 5%, coupled with anticipated annual price increases for advanced packaging of 10%-20%, further underscore positive signals for the semiconductor chip marketWith significant policy backing and industry innovations on the rise, the semiconductor sector is experiencing a rebound, fostering an overall optimistic market outlook.

In a recent transaction, YouA Co., a diversified entity, announced its intention to acquire a 100% stake in Shenzhen Shangyang Tong Technology Co., Ltd

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through a combination of share issuance and cash payments, marking its foray into power semiconductor territoryThe announcement, made on December 10, noted the company's acquisition proposal, involving 37 parties, including Jiang Rong and Jiang Feng, alongside a fundraising effortShangyang Tong is recognized for its focus on the research, design, and sales of high-performance power semiconductor devicesThe company has established steady collaborations with clients across various domains, leveraging its competitive technological advantages and strong brand reputationFollowing the announcement, YouA Cosaw its shares hit the daily upward limit upon resumption of trading the next day.

Shangyang Tong and its achievements stand as a testament to the potential within China's semiconductor industry, being one of the leading designers of power semiconductor devices nationallyIt is noteworthy that Shangyang Tong was among the first companies in China to achieve mass production of superjunction MOSFETs on 12-inch platforms

By November 30, Shangyang Tong had secured 65 authorized integrated circuit layout designs and 98 patents, including 75 invention patents (with three being overseas). The firm’s revenue figures from 2022 to October of this year are telling, with sequential revenues reported at 736 million, 673 million, and 481 million yuan, accompanied by respective net profits of 139 million, 83.28 million, and 31.31 million yuanThis volatility was attributed to shifting macroeconomic conditions, heightened competition within the sector, and ongoing substantial investments in research and developmentAnticipating a gradual market resurgence, projections suggest an improved profitability trajectory for Shangyang Tong as market share increases and product gross margins improve.

Similarly, Baiao Chemical has initiated steps to expand its reach in the semiconductor sector by increasing its stake in Suzhou Xinhuilian Semiconductor Technology Co., Ltd

through its wholly-owned subsidiaryThe company, which primarily engages in the research, production, and sales of isothiazolinone-based industrial biocides, is implementing this investment to obtain voting rights in 46.67% of the target company’s equityThis move is set to further bolster Baiao's position within the semiconductor domain.

The financial commitment involves a substantial infusion of 700 million yuan into Xinhuilian, allowing Baiao Chemical to directly hold 46.67% of its equity, along with delegating voting rights for an additional 7.97%, thereby controlling a total of 54.63% of the voting rightsFurthermore, Baiao is prepared to invest up to an additional 100 million yuan in Xinhuilian’s newly proposed initiativesIf all proceeds smoothly, this venture is projected to facilitate significant advancements for Baiao Chemical within the semiconductor arena.

Double Star Pharmaceuticals is also positioning itself within the semiconductor landscape through a proposed acquisition of 100% of Ningbo Aola Semiconductor Co., Ltd

via a similar share issuance and cash transaction methodAola is dedicated to the research, development, production, and sales of analog and mixed-signal chips, which encompasses three primary categories: clocks, power management, and sensors—each of which has achieved mass production.

Aola’s successful development and mass production of its first anti-shake clock chip marked a significant breakthrough against foreign technological dominance, leading to collaborations with globally recognized integrated circuit design firms such as SiTime, Renesas Electronics, and NXPBy the end of last year, Aola made headlines by licensing its clock chip IP to SiTime in a transaction valued at an impressive 270 million USD over five years, representing a substantial achievement for Chinese high-tech IP in international marketsThis initiative has bolstered Aola's profits, as it reported earnings exceeding 300 million yuan from January to July this year from its IP licensing alone, which constituted a staggering 89.3% of its total revenue in that period.

The recent positive policies foster an environment conducive to business diversification and transformation for these firms, mitigating operational risks while enhancing their ability to withstand market fluctuations