(Yicai Global) Aug. 22 -- Hengxing Science and Technology’s shares rose after the major Chinese maker of diamond wires set out plans to invest CNY1.1 billion (USD161 million) expanding capacity.

Hengxing Science [SHE: 002132] closed up 5.1 percent at CNY7.45 (USD1.09) a share today, after earlier gaining as much as 6.8 percent.

Hengxing Science will build a plant with an annual capacity of 50 million kilometers of diamond wires in Inner Mongolia Autonomous Region, the Henan province-based firm said late yesterday, citing the investment agreement it signed with the Dalad Banner people’s government.

Many Chinese silicon wafer makers have plants in Inner Mongolia to take advantage of the low energy prices and abundant supply of raw materials, the firm added.

Once operational, the new plant is expected to have annual sales of CNY1.7 billion, with a CNY700 million (USD103 million) pre-tax profit based on current market prices, Hengxing Science said, without revealing any further detail, including the construction schedule.

Diamond wires are super thin steel wires of around 120 micrometers in diameter embedded with diamond microparticles and used for high-speeding cutting of solar silicon wafers and other super-hard materials. Demand is surging as more solar power stations are built.

As a one-time consumable, demand is related also to the output of photovoltaic silicon wafers. About 1.5 meters of diamond wire is needed to make one silicon wafer, Li Ming, Hengxing Science’s deputy general manager, told Yicai Global in September 2020.

Hengxing Science announced a year ago that it would invest CNY223 million to raise annual diamond wire capacity by 10 million kilometers from 6 million kms.

Editor: Futura Costaglione