Stock code: 688003 Stock abbreviation: TZTEK

Suzhou TZTEK Technology Co., Ltd

(Address: No. 188, Wutaishan Road, High-tech Zone, Suzhou City, Jiangsu Province)

Issuance of convertible corporate bonds to unspecified targets

Feasibility analysis report on the use of raised funds

February 2025

1. The plan for the use of the funds raised

The total amount of funds raised from the issuance of convertible corporate bonds to unspecified objects shall not exceed 90,000.00 yuan (including 90,000.00 yuan), and the net proceeds after deducting the issuance expenses will be used to invest in the following projects:

Unit: 10,000 yuan

Serial No. Project Name Total Investment To be invested and raised

Gold amount

1 R&D and Industrialization of Industrial Vision Equipment and Precision Measuring Instruments 40,154.06 40,000.00

2 R&D and industrialization of semiconductor measurement equipment 30,863.59 30,000.00

3 R&D and Industrialization Project of Intelligent Driving and Embodied Intelligent Controller 20,109.97 20,000.00

Total 91,127.62 90,000.00

Before the funds raised from the issuance of convertible corporate bonds are in place, the company will invest in advance through its own or self-raised funds according to the actual situation of the implementation progress of the investment project with the raised funds, and replace them in accordance with the procedures stipulated in relevant laws and regulations after the raised funds are in place. If the actual funds raised in this issuance (after deducting the issuance costs) are less than the total amount of funds to be invested in this offering, the board of directors of the company will arrange the specific use of the raised funds according to the importance and urgency of the use of the raised funds, and the insufficient part will be solved by its own funds or self-raised. On the premise of not changing the investment project of the raised funds, the board of directors of the company can make appropriate adjustments to the order and amount of the raised funds of the above projects according to the actual needs of the project.

The company has formulated a relevant system for the management of raised funds, the funds raised from the issuance of convertible corporate bonds will be deposited in the special account designated by the board of directors of the company, and the specific account opening matters will be determined by the board of directors of the company before the issuance, and the relevant information of the special account for raising funds will be disclosed in the issuance announcement.

Second, the specific situation of the investment project of the raised funds

(1) R&D and industrialization projects of industrial vision equipment and precision measuring instruments

1. Basic information of the project

The main body of this project is Suzhou TZTEK Technology Co., Ltd., and the construction site is located in Suzhou High-tech Zone. In this project, the company will be based on its own product and technology accumulation over the years, combined with machine vision industry technology

The development trend of the inspection platform based on the industrial AI large model and the online AOI inspection equipment and PCB industry

R&D and industrialization are carried out in three directions: visual process equipment and precision measuring instruments. The construction of the project is conducive to the company's enrichment of its own product system, and enhance product competitiveness and market share.

2. Project necessity analysis

(1) Meet the needs of industry technology development and expand downstream application scenarios

With the continuous advancement of artificial intelligence (AI) technology, machine vision, as a key technology of industrial intelligence, is undergoing a rapid revolution. From the initial rule-based vision algorithms, to the wide application of deep learning, to today's AI models, the development of AI technology has driven a new round of technological change in the machine vision industry.

Since its establishment, the company has been taking machine vision as its core technology and is committed to promoting industrial transformation and upgrading with leading artificial intelligence technology. Through the implementation of this project, on the one hand, it can meet the technical development needs of the machine vision industry at this stage, and consolidate the company's technical advantages and industry position in this field. On the other hand, the digital and intelligent transformation and upgrading of China's manufacturing industry is driving the expansion and penetration rate of industrial vision equipment and precision measuring instruments, and the implementation of this project will accelerate the iterative upgrading of products, which is conducive to the company to seize market development opportunities and further expand downstream application scenarios.

(2) Build an "AOI+AI" technology platform to improve the accuracy and development efficiency of testing equipment

AOI (Automated Optical Inspection) refers to equipment that uses machine vision algorithms to detect common defects in production, and can be widely used in PCB, consumer electronics, semiconductors and other production fields. AOI inspection equipment collects images of the workpiece through the camera, processes and interprets the visual images according to the pixel distribution, brightness and color of the images, and compares them with the data in the database to identify the defects of the inspected workpiece. Compared with manual inspection, AOI can greatly reduce human error, improve detection accuracy and work efficiency.

Traditional AOI detection technology relies on a large amount of manual intervention and experience accumulation, and requires frequent parameter tuning and rule updates, resulting in long development cycles, high maintenance costs, and difficulty in quickly adapting to new products or process changes. In terms of detection accuracy, traditional methods are based on preset rules and fixed algorithms, and have limited ability to identify complex, small or new defects, especially under complex backgrounds or noise interference. In addition, traditional AOI cannot effectively use massive historical detection data, and lacks the ability to mine and analyze data, resulting in limited continuous optimization of detection models. These limitations severely limit the application effectiveness of traditional AOI in the modern intelligent manufacturing environment.

In order to solve the above-mentioned industry pain points, this project plans to use artificial intelligence technology to develop a detection platform based on industrial AI large models, and give full play to the multi-modal vertical visual inspection model for industrial quality inspection data

Efficient processing and iteration capabilities, improve the efficiency of capturing and discriminating the feature information of massive data, improve the development speed of AOI testing equipment with more intelligent and automated system solutions, reduce manual intervention, greatly shorten the development and verification cycle of AOI testing equipment, and reduce the cost of personalized development.

At the same time, this project will also develop a new generation of AOI online inspection equipment based on this technology platform, use artificial intelligence technology to effectively improve the detection speed and accuracy of the equipment, effectively promote the application of advanced AI software and hardware technology in industrial scenarios such as consumer electronics and PCB inspection, and carry out technical verification and continuous optimization of the platform software in the development process.

Based on this platform, the company is expected to achieve matrix-based, multi-device rapid development, suitable for a variety of downstream application scenarios to meet the customization needs. In addition, while improving equipment testing capabilities and reducing product development costs, the company will also form and consolidate product price advantages, so as to improve the popularity of products in the manufacturing industry and further enhance the company's product competitiveness and market share.

(3) Seize the trend of PCB industry upgrading and accelerate the iterative improvement of product performance

With the continuous growth of the demand for high-end and high-end applications such as AI servers and automotive electronics, the PCB industry is increasingly developing towards high integration and high performance, which also puts forward more stringent requirements for the performance of visual process equipment in the PCB industry.

In order to better serve the high-end and high-end needs of the PCB industry, this project plans to upgrade the company's laser direct imaging equipment (LDI equipment) and CO2 laser drilling equipment and other visual process equipment in the PCB industry, so as to enhance the company's product competitiveness in IC substrates, HDI boards and other application fields. In terms of LDI equipment, this project will develop and equip the equipment with a higher-specification operation control platform, a higher-precision homogenizing lighting module, a higher-resolution exposure lens and a higher-speed data link processing system to improve key performance indicators such as alignment accuracy, resolution ability, and production efficiency, and achieve higher-specification line exposure. In terms of CO2 laser drilling equipment, this project will be based on the company's existing CO2 laser drilling machine main technical framework, and improve the utilization efficiency of lasers through laser efficient reuse and other technologies, so as to develop a new generation of CO2 laser drilling machine products with higher processing efficiency and lower operating costs.

This project upgrades the company's main PCB vision process equipment, which is conducive to the company's product competitiveness, better meet the needs of the downstream application market, and thereby increase the market share of the company's PCB business segment.

Precision measuring instruments have the ability to measure the geometry, size and position accuracy of complex parts with micron and sub-micron accuracy, and are widely used in the precision manufacturing industry. The company has been deeply engaged in the field of industrial vision for many years, and has developed a variety of visual measurement products in the field of industrial measurement equipment, such as offline measurement for laboratories and online measurement for industrial assembly lines, and its application fields cover all walks of life including precision manufacturing including consumer electronics, PCB, and semiconductors.

In order to further broaden the company's product categories in the field of precision measuring instruments and better meet the high-end market demand in the precision manufacturing industry, this project intends to develop and industrialize a new generation of precision measuring instruments such as coordinate measuring machines and high-precision imagers based on the company's years of technology accumulation. The CMM to be developed in this project will be based on the products of well-known overseas manufacturers such as Hexagon and Zeiss, based on the company's self-mastered ultra-high-precision 0.3 micron national special composite measuring position technology, and plans to realize the comprehensive independent control of key core technologies and key components through independent research and development of core components such as measurement software, electronic control system, probe, and test head, so as to meet the domestic substitution needs of precision measuring instruments. The high-precision imager to be developed in this project will be equipped with advanced hardware such as high-resolution optical lens group and linear motor drive system, and equipped with self-developed cutting-edge technologies such as visual geometric error compensation and high-precision motion control, to meet the high-precision measurement needs of semiconductor manufacturing, micro-assembly, consumer electronics, aerospace and other applications.

The implementation of this project will help improve the company's precision measuring instrument product system, meet the measurement needs of high-end application fields, and expand the company's market coverage. At the same time, a number of products to be developed in this project are based on the company's completely independent and controllable core technology and key components, which will help to build the company's core technical barriers and further compete with foreign companies in the market space of high-end application fields under the background of the increasingly significant wave of domestic substitution.

3. Project feasibility analysis

(1) The company has rich experience in R&D and industrialization, and has a solid foundation for the development of a new generation of products

As a core supplier of global visual equipment, the company has maintained close cooperation with leading customers in consumer electronics, PCB and other industries since its establishment. By the end of 2024, the company has served more than 6,000 mid-to-high-end customers around the world, including Foxconn, BOE, Sunwoda, Desay, Dongshan Precision, etc.

In the process of close cooperation with customers, due to the rapid update and iteration of downstream industries such as consumer electronics and PCB, customers' demand for the company's industrial vision equipment has changed significantly, and the company needs to continue to improve the technical path of products

paths, key indicators and application fields have been iteratively upgraded, so as to accumulate rich experience in product development. On the other hand, in the process of R&D and manufacturing, the company attaches great importance to in-depth downstream application scenarios, closely follows the needs of customers and market demand, develops customized solutions according to the special requirements of customers, and accumulates rich customer scenarios and application cases.

In addition, this project plans to develop a new generation of online AOI detection equipment, LDI equipment, CO2 laser

Product types such as drilling machines, coordinate measuring machines and high-precision imagers are all based on the company's existing product framework, combined with the development direction of industry technology and the development trend of localization in mid-to-high-end application fields. The company has accumulated direct and valuable historical experience in the development of these products in the past, providing solid and strong support for the research and development of a new generation of products.

(2) The downstream application field is well developed, and the product market space is broad

The products to be developed in this project include online AOI inspection platform and equipment, and visual process design for the PCB industry

It is equipped with industrial vision equipment, as well as precision measuring instruments such as coordinate measuring machines and high-precision imagers, and its main application fields are consumer electronics, PCB, etc. The overall development of the industry and downstream application fields of the products to be developed in this project is good, and it has a relatively broad market space.

(1) Machine vision industry

Machine vision is one of the key and core technologies to achieve intelligent manufacturing, with a wide range of applications, and the market has shown a sustained and rapid growth trend in recent years. According to GGII data, the global machine vision market is the market in 2023

The scale is about 92.521 billion yuan, a year-on-year increase of about 5.80%, and the global machine vision market is expected to be the market size in 2024

It is expected to exceed 100 billion yuan, with a year-on-year growth rate of about 8.63%.

As the technology and products of Chinese machine vision enterprises gradually narrow the gap with international enterprises in terms of industry versatility and product ease of use, China's machine vision has gradually realized domestic substitution, and has broad development prospects. According to data from the Machine Vision Industry Alliance, the size of China's machine vision market has increased from 24.04 billion yuan in 2021

It rose to $31.15 billion in 2023, growing at a CAGR of 13.8%. Thanks to the advancement of artificial intelligence technology

CMVU predicts that the size of China's machine vision market is expected to reach in 2024

To 37.47 billion yuan, it is expected that the size of China's machine vision market will reach 57.94 billion yuan by 2026, 2024

With an average annual growth rate of about 24.3% until 2026, it is in a period of rapid development.

(2) Precision measurement industry

Precision measuring instruments are widely used in industrial manufacturing, semiconductors, aerospace, biomedicine, etc

The field is the key basic equipment to ensure product quality and promote technological innovation, and the market space is very broad.

According to the data of China Research Network, the global inspection and testing market size will rise from 107.7 billion euros in 2012 to 2023

278.5 billion euros per year, with a compound growth rate of 9.02%. China's inspection and testing market also showed strong performance

Growth momentum, corporate operating income increased from 139.8 billion yuan in 2013 to 489.7 billion yuan in 2023,

The compound growth rate is 13.22%. The CMM and high-precision imager produced in this project are sub-categories of precision measuring equipment, among which the main manufacturers with a large market share include Hexagon and Zeiss Group, and their related operating income has maintained stable growth in recent years, indicating that the development of the industry space is improving. according to

According to public information, Hexagon's revenue grew at a CAGR of 8.63% from 2019 to 2023, according to Zeiss

The Group's Industrial Quality & Research segment revenue grew at a CAGR of 9.6% from FY2019/20 to FY2023/24. In the future, with the upgrading of downstream demand and the continuous development of the domestic substitution trend of precision measuring instruments, it is expected that the market size from domestic manufacturers in China's high-end precision measuring instrument market will continue to expand.

(3) Consumer electronics industry

In recent years, under the combined influence of multiple factors such as the rapid development of Internet technology and the steady increase in residents' income levels, the use of consumer electronics has gradually become a part of residents' daily life, and the sales of consumer electronics have also continued to increase. Affected by factors such as fluctuations in the economic cycle, changes in market saturation and the pace of new product releases, the demand of the consumer electronics industry has shown a certain degree of fluctuation, but the overall demand is still obvious

Uptrend. According to Statista, the global consumer electronics market grew from 2018 to 2023

The overall growth trend is that the market size has grown from $919.5 billion in 2018 to 10,276 in 2023

billion dollars.

In the long run, the development trend of digital life will continue to generate new demand for consumer electronics.

According to Statista's forecast, the consumer electronics industry market will further grow to $1,176.7 billion in 2028

meta, which remains high overall. The consumer electronics industry still contains huge development potential, and the long-term development trend is generally good.

(4) PCB industry

PCB is the basis of electronic information products, and its downstream application fields involve almost all electronic products, including communication and related equipment, computers and related equipment, consumer electronics, automotive electronics, aerospace electronics, etc. In 2023, affected by the weak demand in the consumer electronics industry, the market size of the global PCB industry will decline.

Pullback to $69.5 billion. The market size of China's mainland PCB industry has continued from $32.9 billion in 2019

After growing to $39.8 billion in 2022, the industry market size will recover to $37.8 billion in 2023.

In the medium to long term, strong demand represented by artificial intelligence, high-speed networking, and electric vehicles will continue to support the growth of the high-end HDI, high-speed high-rise, and package substrate segments, and usher in a new growth cycle for the PCB industry. According to Prismark estimates, from 2023 to 2028, the compound growth rate of the global output value of packaging substrates, multilayer boards with more than 18 layers, and HDI boards will be 8.8%, 7.8%, and 6.2%, respectively, and the compound growth rate of the overall output value of PCB will be 5.4%, providing sufficient market space for the application of products in the mid-to-high-end PCB field.

(3) The company has rich technology accumulation and provides development support for project implementation

Since its establishment, the company has always attached importance to independent innovation, continued to increase R&D investment, and continuously improved the core competitiveness of the company's technology and products, laying a good technical foundation for the development of various products of this project. In terms of online AOI detection platform and equipment, the company continues to pay attention to the rapid development of artificial intelligence technology in recent years, and has formed core technologies such as the core technology of visual intelligent detection algorithm and the multi-modal industrial AI vertical visual large model technology, which will provide technical support for the development and application of AI technology for this project. In terms of PCB vision process equipment, the company's self-developed core technologies such as high-resolution ultraviolet projection optical imaging technology, mid-infrared laser optical design and application are all advanced in the industry, providing a feasible technical path for equipment performance optimization; In terms of CMM, the company has achieved a measurement accuracy of 0.3 microns through the national major scientific instrument and equipment development special project "Development and Application of Composite High-precision Coordinate Measuring Instruments", which is equivalent to the accuracy of the most advanced similar products in the world, and solves the core technical problems of product development; In terms of high-precision imager, the company's core technical personnel have participated in the formulation of a number of imager-related industry standards and national standards, and have accumulated strong development technical strength in related fields.

To sum up, the company has sufficient technical accumulation in multiple development directions of this project to ensure the technical feasibility of this project.

4. Project investment estimate

The total investment amount of this project is 401.5406 million yuan, and the amount of raised funds to be invested is 40,000.00 yuan.

5. The project involves matters submitted for approval

As of the date of issuance of this report, the filing and environmental impact assessment procedures of the project are still in the process of being processed. The company will handle it in a timely and compliant manner in accordance with the requirements of relevant national laws and regulations.

(2) R&D and industrialization projects of semiconductor measurement equipment

1. Basic information of the project

The main body of this project is Suzhou TZTEK Technology Co., Ltd. and its wholly-owned subsidiary, MueTecAutomatisierte Mikroskopie und Me? technik GmbH (hereinafter referred to as "MueTec") is located in Suzhou, Jiangsu Province, China and Deggendorf, Germany. The company will focus on technical difficulties such as core optical components and systems, precision motion control systems, and overlay measurement methods, carry out key technical research, core component research and development and complete equipment development for overlay error measurement equipment, complete product iteration and localization of core components at 90nm and above, 40~65nm nodes, and carry out technology research and development and industrialization for 28nm and 14nm nodes. The construction of the project is conducive to promoting the localization process of semiconductor measurement equipment, and improving the company's penetration rate in the semiconductor field by giving full play to the synergistic advantages at home and abroad.

2. Project necessity analysis

(1) Improve the independent research and development capabilities of advanced measurement technology and promote the localization process of semiconductor measurement equipment

Semiconductor measurement equipment is mainly used to quantitatively describe the size and material characteristics of the microstructure of the wafer surface, such as the measurement of physical parameters such as film thickness, critical size, etching depth, surface topography, etching, etching, and is one of the key links to ensure the yield rate of chip production. According to VLSI statistics, the world's top five companies account for more than 84.1% of the total market share, all from the United States and Japan, of which Kelei Semiconductor is the only one, accounting for 55.8% of the total market share of testing and measurement equipment. At present, the field as a whole is in the initial stage of localization substitution, and the localization rate will be about 5% in 2023, and there is still huge room for improvement. Accelerating the independent R&D and industrialization of semiconductor measurement equipment has become an urgent need for China's semiconductor industry to break through the external technology blockade and achieve independent control.

The company's R&D and industrialization project of semiconductor measurement equipment has far-reaching strategic significance for enhancing the international competitiveness of China's semiconductor special equipment and ensuring the safety of China's semiconductor industry chain. The implementation of this project will strongly promote the pace of import substitution in the domestic semiconductor equipment industry, reduce the dependence on imported equipment, reduce supply chain risks, and promote the technological progress and industrial upgrading of the entire semiconductor equipment industry.

(2) Conform to the development of miniaturization and high integration of semiconductor products to meet the needs of downstream customers for high-precision measurement equipment

With the popularity of consumer electronics such as smartphones, wearables, and the Internet of Things, as well as automotive appliances

There is an urgent need for high-performance, low-power, and miniaturized semiconductor devices in the fields of sub-electronics, aerospace, and medical electronics, and the semiconductor industry is undergoing profound changes in miniaturization and high integration. On the one hand, from

The initial 90nm and above processes and then 65/40nm, 28nm and even 14nm and below process technologies are not

The breakthrough marks that semiconductor manufacturing has entered a new era at the nanoscale; On the other hand, the rise of three-dimensional integration and heterogeneous integration technology has significantly improved the performance density of chips, promoted the deep integration of different materials, processes and functional chips, and promoted the birth of multi-functional and highly integrated systems. The development trend of the above-mentioned cutting-edge technologies has jointly promoted the development of semiconductor products in the direction of smaller size, higher integration and better performance, and at the same time, downstream customers have put forward more stringent requirements for high-precision measurement equipment, driving the semiconductor industry chain to a higher level of technological innovation and upgrading.

As an important equipment in the semiconductor production and testing process, the overlay error measurement equipment is used to accurately measure the alignment accuracy of multi-layer circuit patterns in the chip manufacturing process, which is directly related to the performance, yield and reliability of the final chip. Relying on the existing technology precipitation in the semiconductor field, the company plans to carry out key technical research, core component research and development and complete machine equipment development around technical difficulties such as core optical components and systems, precision motion control systems, and overlay measurement methods through this fundraising project, complete the iteration of 90nm and above, 40~65nm node products, and accelerate the pace of technology research and development and industrialization for 28nm and 14nm advanced process nodes. The implementation of the project will help the company to further build stronger technical barriers in the semiconductor field, enhance market competitiveness, and meet the needs of downstream customers for high-precision measurement equipment.

(3) Strengthen the collaborative innovation of technology between listed companies and German subsidiaries to promote the high-quality development of the company's semiconductor business

The company is committed to promoting the development of industrial digitalization and intelligence, and has rich experience in industrial application in the field of industrial vision and precision measuring instruments. In 2021, the company completed the acquisition of MueTec in Germany, and strategically laid out the semiconductor measurement equipment business field. As a high-end technology R&D and innovation enterprise in the field of semiconductor front-end measurement, MueTec provides wafer manufacturers with high-precision optical measurement equipment for wafer products, compared with domestic equipment manufacturers, in addition to more than 30 years of experience in serving customers in the semiconductor field and advanced technical strength, it also has international advantages, can timely obtain cutting-edge technology in the semiconductor industry, and recruit high-end R&D talents in the field of global semiconductor equipment.

In view of the acceleration of the localization process of semiconductor measuring equipment in China and the rapid development of the semiconductor industry, the company plans to jointly carry out the research and development and industrialization of semiconductor measurement equipment with its German subsidiary through the implementation of this project. Relying on MueTec's more than 30 years of industry experience serving semiconductor customers and the company's rich industries

The implementation of this project will help give full play to the advantages of both parties and enhance the company's core competitiveness in the field of semiconductor measurement equipment.

Therefore, the implementation of this project is a necessary move for the company to deepen the layout of the semiconductor business and promote the high-quality development of the company's semiconductor business.

3. Project feasibility analysis

(1) The relevant national industrial policies provide a solid policy foundation for this project

In recent years, China has attached great importance to and vigorously supported the semiconductor industry, and has introduced a series of support policies to continuously promote the development of semiconductors and related special equipment in multiple dimensions such as capital, taxation, technological innovation and talent training. In July 2024, the Ministry of Industry and Information Technology and other departments issued the "Deployment of the Formulation of the List of Integrated Circuit Enterprises Enjoying the Additional Deduction Policy in 2024", which implements the VAT additional deduction policy for eligible integrated circuit design, production, packaging and testing, equipment, materials and other enterprises; In December 2023, the National Development and Reform Commission (NDRC) issued the Guiding Catalogue for Industrial Structure Adjustment (2024 Edition), which listed the manufacturing of integrated circuit equipment and key components as an encouraged project. In February 2023, the Ministry of Industry and Information Technology and other departments issued the "Action Plan for the Development of Intelligent Testing Equipment Industry (2023-2025)", which clarified that intelligent testing equipment, as the core equipment of intelligent manufacturing, is an important component of the "six bases of industry" and an important area for the upgrading of the industrial base.

In the context of intensified technology competition between China and the United States, the global semiconductor industry is facing profound changes. The semiconductor export control policies introduced by the United States in recent years, especially the sanctions on Chinese companies, have further increased the uncertainty of the industry and promoted the transformation of the global semiconductor industry to multipolarity and decentralization. As a result, the intensive introduction of relevant national policies for the semiconductor industry demonstrates China's great attention to and firm support for this strategic emerging industry, and the company's fundraising project is expected to benefit from the above-mentioned industrial policies, providing a strong policy foundation for the smooth promotion of the company's projects.

(2) The broad downstream market space has laid a market foundation for this project

In recent years, emerging industries such as AI and related applications, new energy vehicles, and advanced packaging have stimulated huge downstream market demand, and continue to promote global and domestic wafer fabs to increase production expansion and equipment procurement, and the semiconductor industry will maintain a growth trend in the future. According to SEMI, the global semiconductor wafer is expected to be in 2025

Manufacturing capacity will increase 7% year-over-year to an all-time high of 33.7 million pieces per month (8-inch equivalent).

Domestically, SEMI expects the year-on-year growth rate of Chinese mainland's wafer manufacturing capacity in 2024/2025 respectively

15%/14%, higher than the global level for the same period.

Under the wave of investment in the global and domestic semiconductor industry, the market size of semiconductor equipment is expected to benefit from the expansion plan of various regions and grow. According to SEMI data, the global semiconductor equipment market size grew from 2010

$39.5 billion grew to $106.3 billion in 2023 and is expected to grow to $140 billion by 2030

Dollar. Among them, Chinese mainland, as the world's largest semiconductor equipment market, is expected to maintain its position as the world's largest large-scale fab equipment spending by 2027, with an investment of more than US$100 billion in the next three years.

For China's semiconductor measurement equipment market, according to VLSI Research data, China will be the largest in 2023

The Lu semiconductor inspection and measurement equipment market size reached $4.360 billion, with an average annual value from 2019 to 2023

The compound growth rate is 26.61%. With the continuous guidance of national policies and the continuous enhancement of the technical strength of local enterprises, domestic semiconductor measurement equipment is expected to accelerate the pace of replacing imported products to meet the growing demand for high-precision and high-efficiency detection and measurement in the domestic semiconductor industry.

(3) Mature technology and personnel reserves provide technical support for this project

The overlay error measurement equipment developed in this project achieves high-precision measurement by using high-resolution imaging technology and image detection measurement method, and the realization of its core technology relies on machine vision algorithms, advanced vision sensors and other R&D achievements related to the field of machine vision. The project was jointly implemented by MueTec, a wholly-owned subsidiary, and the company, which has a mature product technology system, development experience and personnel reserves, which provides technical support for the smooth implementation of the project.

Founded in 1991, MueTec has more than 30 years of experience in semiconductor wafer and mask optical metrology

Production, R&D and sales experience, serving many well-known semiconductor wafer manufacturing customers around the world, helping them improve their production processes and improve yields. MueTec has a fully independent intellectual property rights algorithm and software platform, and has a wealth of technology and application experience in precision optical systems, infrared optical systems, precision mobile platforms, and complete product design and system integration. The company has rich experience in industrial application in the field of industrial vision and precision measuring instruments, mastering measurement algorithms, precision opto-electromechanical and other related core technologies, and has the ability to develop core components in the localization. For the overlay error measurement equipment, the company has mastered the core technologies such as the optical imaging alignment system for overlay error measurement and the fixed focus method of overlay error measurement equipment after continuous research, and has applied for invention patents.

In terms of personnel reserves, MueTec has an international product development team with core technical personnel

He has many years of experience in the research and development of semiconductor front-end measurement equipment. The company attaches great importance to the training and construction of the R&D team, which has a solid professional background in multiple disciplines, including machine vision, deep learning, measurement and control technology and instruments, electronic information, electromechanical and other majors.

4. Project investment estimate

The total investment amount of this project is 308.6359 million yuan, and the amount of raised funds to be invested is 30,000.00 yuan.

5. The project involves matters submitted for approval

As of the date of issuance of this report, the filing and environmental impact assessment procedures of the project are still in the process of being processed. The company will handle it in a timely and compliant manner in accordance with the requirements of relevant national laws and regulations.

(3) R&D and industrialization projects of intelligent driving and embodied intelligent controllers

1. Basic information of the project

The main body of the project is Suzhou Tianzhun Xingzhi Technology Co., Ltd., a holding subsidiary of the company, and the construction site is located in Suzhou High-tech Zone. In this project, the company will rely on its own technology accumulation, product accumulation and industry application experience in the fields of edge computing and intelligent driving domain controllers, and focus on the two product lines of vehicle-grade intelligent driving domain controllers and embodied intelligent controllers, and carry out R&D and industrialization of the underlying software and hardware platforms and related tool chains. The company will further improve the performance indicators and functional perfection of domain controller products, effectively support more complex and higher-level autonomous driving scenarios such as urban NOA, as well as innovative applications for humanoid robot scenarios, continuously expand the breadth and depth of technology applications, and open up new profit growth points for the company.

2. Project necessity analysis

(1) Promote the implementation of localized intelligent driving domain control solutions to achieve independent controllability, cost reduction and efficiency increase

As the core component of the intelligent driving system, the intelligent driving domain controller is responsible for integrating multiple sensor data, performing complex algorithm calculations and decision-making, and plays a key role in the driving safety and intelligent experience of the vehicle. At present, foreign manufacturers still occupy a large part of the market share of the domestic intelligent driving chip market, and in the context of the current global geopolitical conflicts and frequent international trade frictions, facing the potential risk of industrial decoupling, the independent and controllable demand for China's intelligent driving core supply chain is constantly strengthening. With the improvement of the capabilities and product verification of domestic intelligent driving chip manufacturers, the number of fixed points obtained by domestic chip intelligent driving solutions is increasing, but comparatively

Mature foreign chip manufacturers are still facing problems such as the late start of high-performance automotive chips and the lack of supporting software and hardware development. Therefore, it is an urgent problem to be solved in China's intelligent driving domain controller industry to enhance the development ability of supporting software and hardware of domestic chips, accelerate the implementation process of chip localization solutions, and improve the market application rate of domestic chips.

At the same time, with the intensification of competition in the new energy vehicle market, major manufacturers will increase the competition of high-end intelligent driving for models below 200,000 yuan, and the pressure to reduce costs and increase efficiency continues to be high, and the market has a growing demand for high-performance, high-reliability and cost-advantaged intelligent driving domain controllers. In order to meet the above-mentioned market demand, this project focuses on the development trend of increasing the penetration rate of localized chips, provides vehicle manufacturers with high-performance and cost-effective localized mass production solutions for intelligent driving domain control, and improves the autonomy and controllability of China's intelligent driving core supply chain while reducing costs and increasing efficiency.

(2) Conform to the trend of accelerating the penetration of intelligent driving and developing to a high-end, and seize market development opportunities

At present, China's new energy vehicle industry is experiencing an important stage of development of intelligence and networking, and the intelligent driving function of automobiles is penetrating into low-end models while continuing to move towards high-level autonomous driving. Considering the regulations, rights and responsibilities, and technical long-tail problems faced by intelligent driving at the L3 level and above, the upgrade of assisted driving configuration to L2/L2+ level (ADAS) in 2025 will be the main direction for large-scale commercialization. With the gradual decline in automobile prices and the continuous improvement of consumers' demand for intelligent driving functions, intelligent driving functions are gradually developing from high-end models to mid-to-low-end models, and their assembly rate in passenger cars is continuing to increase. As a key component in the decision-making process of intelligent driving, the demand for intelligent driving domain controller continues to increase due to the further penetration of intelligent driving functions. At the same time, intelligent driving technology is also continuing to progress towards high-level autonomous driving, and puts forward higher requirements for the performance, reliability and system integration of domain controllers.

Through the implementation of this project, the company intends to further improve the performance indicators and functional perfection of domain controller products, promote the upgrading of intelligent driving domain controllers, effectively support more complex and higher-level autonomous driving scenario applications such as urban NOA, create more reliable and cost-effective solutions for the industry, and seize market development opportunities.

(3) Accelerate the popularization and promotion of embodied intelligence, and develop edge computing business application scenarios

With the emergence of various large models represented by ChatGPT, AI is endowed with "shape" and interactive energy

The embodied intelligence of force has entered a new stage of development, bringing technological changes to scenarios such as humanoid robots and low-altitude economy. With the aging of the population and the rise of labor costs, the demand for embodied intelligence is growing.

Embodied intelligence has become the next wave of artificial intelligence recognized by many industrial entities in the industry. With the support of large models, embodied intelligence has a certain adaptive learning ability, which can self-evolve based on its own experience and environmental feedback, continuously optimize behavioral strategies, and enhance its ability to cope with complex tasks.

Embodied intelligence controllers are one of the key components of embodied intelligence, which is used to understand and execute complex tasks to enable natural interaction, precise operation, and efficient collaboration with humans. The realization of the above functions requires the underlying hardware support that can process massive amounts of information, make intelligent decisions, and guide body actions. In order to seize the development opportunities of embodied intelligence and humanoid robot industry, and meet the application of embodied intelligence in complex and demanding scenarios, the company intends to provide a full range of AI algorithm toolchain solutions for embodied intelligence applications through the implementation of this project, covering simulation, simulation, training and deployment, so as to accelerate the popularization and development of embodied intelligence in all walks of life. At the same time, the company will develop embodied intelligent controllers with powerful computing power, which can meet the computing needs of complex scenarios, support a variety of sensor access, and have rich interface expansion, which is convenient for customers to flexibly deploy and verify, and further develop edge computing business application scenarios.

3. Project feasibility analysis

(1) The broad market space provides an effective guarantee for the implementation of the project

The domain controller products involved in this fundraising project are the key hardware in the field of intelligent driving and embodied intelligence, and with the development of the automotive industry and artificial intelligence technology, the market space in the downstream field is expanding.

In the field of intelligent driving, under the continuous promotion of policy, demand and supply, the level of automotive intelligence has been rapidly improved. As a key component in the decision-making process of intelligent driving, the demand for intelligent driving domain controller continues to increase due to the further penetration of intelligent driving functions into low-end models. According to Frost & Sullivan's forecast, the market size of China's passenger car intelligent driving domain controller will reach 46.1 billion yuan in 2025, and the market size will further exceed 100 billion yuan in 2030, with a penetration rate of 72.8%.

In the field of embodied intelligence, in recent years, the rise of multimodal large models has injected strong impetus into the development of embodied intelligence. In the context of the aging of the population and the rise of labor costs, the demand for embodied intelligence is growing, and embodied intelligence has become the next wave of artificial intelligence recognized by many industrial entities in the industry, and is expected to be widely expanded in many fields such as industry, healthcare, logistics and transportation in the future. According to the Toubao Research Institute, in 2023, the size of China's embodied intelligence market will reach 157.27 billion yuan. With technological breakthroughs on the large model side, the embodied intelligence market size is expected to grow at a CAGR of 16.5% to 225.9 billion yuan by 2027.

(2) Rich experience in product application lays the foundation for project implementation

In 2018, the company began to develop the unmanned logistics vehicle business, cooperated with Cainiao Logistics, a subsidiary of Alibaba Group, and entered the unmanned driving field earlier and accumulated rich experience in products and applications. The company's unmanned logistics vehicle hardware platform is composed of a computing unit, a sensing unit, a network communication unit, a human-computer interaction unit and an execution unit, which accurately fuses multi-sensor data through a multi-sensor fusion calibration algorithm to provide accurate and reliable synchronous real-time data input for the autonomous driving algorithm. In 2020, the company became the official partner of NVIDIA Jetson, developing edge computing controllers based on the NVIDIA Jetson platform, which are widely used in various large-scale transportation and pan-robot scenarios, providing large-scale computing power computing platform and controller products and solutions for various scenarios such as unmanned delivery vehicles, smart transportation, rail transit, smart ports, and smart mines, and actively expanding application scenarios such as low-altitude economy and embodied intelligence.

In 2022, the company and Horizon Robotics officially carried out in-depth cooperation in technology research and development and product development in large transportation fields such as high-level intelligent driving and vehicle-road coordination. On the basis of the edge computing domain controller, the company has developed an intelligent driving domain controller based on the horizon journey solution. The company's autonomous driving domain controller product based on the Horizon Journey5 chip has made a breakthrough in 2023, and has been awarded the fixed-point project and proof-of-concept project for the development of intelligent driving domain controller from GAC, SAIC and other OEMs. The company's domain controller products for L4 autonomous driving have cooperated with more than 100 customers at home and abroad, and are the ecological partners of Baidu's Apollo platform, covering L4 application scenarios such as Robotaxi, Robobus, Robotruck, construction vehicles, low-speed unmanned delivery vehicles, and sweepers. At the same time, the company has passed the IATF16949 and ISO26262 system certification, which provides a reliable guarantee for the smooth implementation of the project and the future pre-assembly mass production.

To sum up, the company has accumulated rich product application experience in edge computing, intelligent driving domain controller and other related fields, which has laid a solid foundation for the implementation of this project.

(3) The accumulation of technology and team provides strong support for the implementation of the project

The intelligent driving domain controller and the embodied intelligent controller work on the same principle, both of which receive data from sensors such as cameras, lidars, and millimeter-wave radars, and achieve accurate perception of the surrounding environment with the help of data fusion technology. At the same time, with the on-board decision-making algorithm, decisions are made in real time based on the data provided by the perception system.

In the field of intelligent driving domain controller, the company has mastered core technologies such as L4 autonomous driving general control platform technology, time synchronization technology, and multi-scene multi-modal fusion perception technology, which can effectively improve domain control

the overall performance, reliability and usability of the product; In the field of embodied intelligent controllers, the company has made a breakthrough in heterogeneous bus communication technology in terms of computing platform, improved the real-time and accuracy of data interaction, and designed an integrated domain control computing platform to quickly respond to development needs. In terms of underlying software, the company uses PPS, GPRMC, PTP and other technologies to achieve high-precision timing, and uses CUDA to accelerate image processing and deep learning model inference, which improves real-time performance and system response speed, reduces power consumption, and significantly improves system efficiency and performance.

In terms of talent team, the company has established a core R&D team composed of a number of senior experts in the field of intelligent driving and embodied intelligence, with an average of more than 10 years of experience in the core members of the team, and have rich development and application experience in software research and development, hardware design, system architecture, sensor technology, autonomous driving domain controller, edge computing and other fields.

In summary, the company has many years of technical precipitation and talent accumulation in the field of intelligent driving and embodied intelligent controllers, which provides strong support for the smooth implementation of this project.

4. Project investment estimate

The total investment amount of this project is 201.0997 million yuan, and the amount of raised funds to be invested is 20000.00 yuan.

5. The project involves matters submitted for approval

As of the date of issuance of this report, the filing and environmental impact assessment procedures of the project are still in the process of being processed. The company will handle it in a timely and compliant manner in accordance with the requirements of relevant national laws and regulations.

3. The impact of the raised funds on the company's operation and financial situation

(1) The impact of the raised funds on the company's operation and management

The funds raised this time will be used for: (1) R&D and industrialization projects of industrial vision equipment and precision measuring instruments; (2) R&D and industrialization projects of semiconductor measurement equipment; (3) R&D and industrialization projects of intelligent driving and embodied intelligent controllers. The investment projects of the raised funds are all around the company's main business, which is in line with the relevant national industrial policies and the company's overall strategic development direction in the future, and has good market development prospects and economic benefits. The implementation of the fundraising project is conducive to the company to further expand the high-end product category, conform to the trend of industry technology upgrading, improve the independent research and development capabilities of equipment and core components, compete with international leading manufacturers, consolidate and improve the company's market position, and then improve the company's overall competitiveness and anti-risk ability

The company's long-term development needs and shareholders' interests.

(2) The impact of the raised funds on the company's financial condition

After the funds raised by the convertible corporate bonds are in place, the company's total assets and total liabilities will increase accordingly, which can enhance the company's financial strength and provide a strong guarantee for the company's business development. Before the conversion of convertible corporate bonds into equity, the financial cost of the company's use of the raised funds is low, and the risk of interest repayment is small. With the successive conversion of convertible corporate bond holders, the company's asset-liability ratio will gradually decrease, which is conducive to optimizing the company's capital structure and enhancing the company's ability to resist risks.

Although the financial indicators such as return on net assets and earnings per share may decline to a certain extent in the short term, with the implementation of the fund-raising project, the company's operating scale and profitability will be further improved, the business development strategy will be strongly supported, and the future operating performance will be improved.

Fourth, the conclusion of the feasibility analysis

The issuance of convertible corporate bonds to unspecified objects to raise funds investment project is an important measure for the company to maintain its intrinsic value, improve the level of technology research and development, enhance its capital operation strength, and improve the company's profitability.

Through the implementation of the investment project of the raised funds, it is conducive to enhancing the company's competitiveness, helping to enhance the company's sustainable operation ability and profitability, in line with the interests of all shareholders of the company and convertible bond investors, and laying a solid foundation for the company's sustainable development.

To sum up, the issuance of convertible corporate bonds to unspecified objects to raise funds for investment projects has good feasibility and is in line with the interests of the company and all shareholders.

Board of Directors of Suzhou TZTEK Technology Co., Ltd

February 12, 2025