Stock code: 688126 Stock abbreviation: Shanghai Silicon Industry Announcement No.: 2024-028

Shanghai Silicon Industry Group Co., Ltd.

Announcement on Foreign Investment and Connected Transactions of Wholly Owned Subsidiaries

the company's board of directors and all directors to ensure that the contents of this announcement does not exist any false records, misleading statements or major omissions, and the authenticity, accuracy and completeness of the contents of the legal responsibility.

Important Content Tips:

Shanghai Silicon Industry Group Co., Ltd. (hereinafter referred to as "the Company") intends to adopt a wholly-owned subsidiary, Shanghai

(hereinafter referred to as "Shanghai Xinsheng") or its subsidiaries and national

Integrated Circuit Industry Investment Fund Phase II Co., Ltd. (hereinafter referred to as "Industry Fund Phase II"), Tai.

(hereinafter referred to as "Fenshui Capital" or "Taiyuan Investor") or

Its subsidiary jointly contributed 5,500 million yuan to set up a holding subsidiary, Taiyuan Jinke Silicon Materials Technology

Ltd. (tentative name, subject to the name approved by the market supervision and management department, hereinafter referred to as "the standard".

company "), the implementation of integrated circuits with 300mm silicon wafer capacity upgrade Taiyuan project. Among them, Shanghai Xinsheng

It is proposed to contribute 2,800 million yuan directly or through its subsidiaries in monetary funds, accounting for the proportion of registered capital.

50.91; The second phase of the Industrial Fund intends to contribute 1,500 million yuan in monetary funds, accounting for the proportion of registered capital.

27.27; Fenshui Capital intends to contribute 1,200 million yuan directly or through its subsidiaries in monetary funds, accounting

The proportion of registered capital is 21.82.

This foreign investment constitutes a related transaction, but does not constitute a major asset restructuring, there are no major legal obstacles. The source of funds for this foreign investment is the company's own funds or self-raised funds, which will not affect the company's normal production.

and operations, and there is no harm to the interests of the listed company and all shareholders.

This foreign investment and related transaction was approved by the second board of directors of the company on June 11, 2024.

Ten meetings to consider and approve, related directors Yang Zhuo, Yuan Jiancheng to avoid voting. The matter is still to be submitted to the company.

Consideration of the general meeting of shareholders.

Related Risk Warning: The establishment of the target company still needs to obtain the approval of the local market supervision and administration bureau, there is.

Some uncertainty. In the course of implementation, the project may be subject to changes in the international environment, macro-policy changes,

The project may have certain market risks and economic risks due to many factors, such as market changes and technological progress.

risk and management risk. The company will pay full attention to the changes in the industry, market and technology development, play the whole

We will dynamically assess risks and simultaneously adjust risk response strategies to ensure the health and sustainability of the target company.

Development. The company will continue to improve the corporate governance structure of the proposed company and establish and improve the internal control process.

and effective monitoring mechanism to optimize the company's overall resource allocation and prevent and reduce foreign investment risks.

Overview of 1. Foreign Investment and Connected Transactions

Basic situation of (I) foreign investment

In order to actively respond to the national semiconductor industry development strategy, accelerate the company's long-term development strategic planning, seize the development opportunities of the semiconductor industry, continuously expand the production scale of 300mm silicon wafers for integrated circuits, and enhance the company's global silicon wafer market share and competitive advantage, the company plans to invest in the construction of 300mm silicon wafer capacity upgrading project for integrated circuits. After the completion of the project, the company's 300mm silicon wafer production capacity will be based on the existing 600000 pieces/month, reaching 1.2 million pieces/month. For details, please refer to the announcement of Shanghai Silicon Industry Group Co., Ltd. on investment and construction of 300mm silicon wafer capacity upgrading project for integrated circuits disclosed on the website of Shanghai Stock Exchange (www.sse.com.cn) and designated information disclosure media on the same day.

In December 2023, the company's wholly-owned subsidiary Shanghai Xinsheng and Taiyuan Municipal People's Government, Taiyuan Zhongbei High-tech

The Management Committee of the Technology Industry Development Zone signed the "Cooperation Agreement on the Semiconductor Silicon Wafer Material Production Base Project" and invested in the construction of a "300mm semiconductor silicon wafer pulling and cutting and polishing production base". For details, please refer to the company.

On December 30, 2023, disclosed on the website of the Shanghai Stock Exchange (www.sse.com.cn) and designated information.

Announcement of Shanghai Silicon Industry Group Co., Ltd. on the Subsidiary's Proposal to Sign a Cooperation Agreement on the Semiconductor Silicon Wafer Material Production Base Project in the media.

Recently, the company plans to invest 5,500 million yuan through its wholly-owned subsidiary Shanghai Xinsheng or its subsidiary, industrial fund phase ii, fenshui capital or its subsidiary to set up a holding subsidiary Taiyuan Jinke silicon material technology co., ltd. (tentative name, subject to the name approved by the market supervision and management department) to implement the Taiyuan project of upgrading the production capacity of 300mm silicon chips for integrated circuits. Among them, Shanghai Xinsheng plans to contribute 2,800 million yuan in monetary funds directly or through its wholly-owned subsidiaries, accounting for 50.91 percent of the registered capital; the second phase of the industrial fund plans to contribute 1,500 million yuan in monetary funds, accounting for 27.27 percent of the registered capital; and Fenshui Capital plans to contribute 1,200 million yuan in monetary funds directly or through its wholly-owned subsidiaries, accounting for 21.82 percent of the registered capital.

Taiyuan Jinke Silicon Material Technology Co., Ltd. will mainly engage in 300mm semiconductor silicon wafer business and implement the Taiyuan project to upgrade the production capacity of 300mm silicon wafers for integrated circuits. The project is expected to have a total production capacity target of the construction of crystal production.

Can 600000 pieces/month (including heavy doping), cutting, grinding and polishing capacity of 200000 pieces/month (including heavy doping), and promote 300mm silicon

The chip technology is constantly upgraded and iterated to meet the process needs of different technology nodes in China.

(II) Related Transactions and Decision Approval Procedures

Among the investors involved in this investment, the second phase of the Industrial Fund intends to contribute 1,500 million yuan in currency. Whereas, the National Integrated Circuit Industry Investment Fund Co., Ltd. (hereinafter referred to as the "Industrial Fund Phase I") is a major shareholder holding more than 5% of the company's shares, and the directors of the Industrial Fund Phase I Zhang Xin, Yan Jianqiu, Yang Gaofeng, Tang Xuefeng, Li Guohua also served as the director of the Industrial Fund Phase II, and Fan Bing, the director of the Industrial Fund Phase I, also served as the supervisor of the Industrial Fund Phase II. In addition, Huaxin Investment Management Co., Ltd., as the fund manager, manages the first phase of the industrial fund and the second phase of the industrial fund according to their respective entrustment management agreements. According to the principle of substance over form, the second phase of the industrial fund is a related party of the company. Therefore, this transaction constitutes a related transaction, but does not constitute a major asset restructuring. In view of the fact that the amount of this related party transaction has reached more than 30 million yuan and accounts for more than 1% of the company's latest audited total assets, the matter needs to be submitted to the general meeting of shareholders of the company for deliberation after being deliberated by the board of directors.

This foreign investment and related party transaction was deliberated and approved by the 20th meeting of the second board of directors of the company on June 11, 2024, and the related Dong Yangzhuo and Yuan Jiancheng avoided voting. The matter still needs to be submitted to the company's shareholders' meeting for consideration.

Basic information on the subject of the 2. joint venture.

1. Basic situation of Shanghai Xinsheng

(1) Company: Shanghai Xinsheng Semiconductor Technology Co., Ltd.

(2) Type of enterprise: limited liability company (wholly owned by a legal person not invested or controlled by a natural person)

(3) Domicile: 1-4, 1000 Yunshui Road, Lingang New Area, China (Shanghai) Pilot Free Trade Zone

Building 6-19

(4) Legal representative: Li Wei

(5) Registered capital: 2380 million yuan

(6) Major shareholders: 100 per cent of the shares held by the company

(7) Date of Establishment: June 4, 2014

(8) Business scope: General items: high quality semiconductor silicon wafers, silicon-based semiconductor materials, semi-conductors.

Research and development, production and sales of semiconductor equipment and components, semiconductor materials and device-related technologies.

Technology development, technology transfer, technology consulting, technology services, import and export of goods, technology in and out.

mouth, business management consulting, non-residential real estate leasing, machinery and equipment leasing. (Except as required by law

Except for approved projects, business activities shall be carried out independently according to law by virtue of business license)

(9) Key financial data for the most recent fiscal year (audited): as of December 31, 2023

Japan, total assets of 14,424.3814 million yuan, net assets of 7,526.8831 million yuan, 2023

Operating income is 1,394.1918 million yuan and net profit is 130.323 million yuan.

2, the basic situation of the second phase of the industrial fund.

(1) Enterprise Name: National Integrated Circuit Industry Investment Fund Phase II Co., Ltd.

(2) Type of enterprise: other limited companies (unlisted)

(3) Domicile: 701-6, Floor 7, Building 52, No.2 Jingyuan North Street, Beijing Economic and Technological Development Zone, Beijing

(4) Legal representative: Zhang Xin

(5) Registered capital: 204,150 million yuan

(6) Date of establishment: October 22, 2019

(7) Business scope: project investment, equity investment; investment management, enterprise management; investment consulting.

("1. No public fundraising may be made without the approval of the relevant authorities; 2. No public

Conduct trading activities in securities products and financial derivatives; 3. No loans may be granted; 4. No.

Guarantees may be provided to enterprises other than those in which they invest; 5. Investors may not be promised to invest.

Capital is not subject to loss or minimum return is promised "; projects subject to approval in accordance with the law, subject to the relevant

After approval by the department, business activities shall be carried out in accordance with the approved contents.)

The first phase of the industrial fund is a major shareholder holding more than 5% of the company's shares, and the directors of the first phase of the industrial fund Zhang Xin, Yan Jianqiu, Yang Gaofeng, Tang Xuefeng and Li Guohua also serve as the directors of the second phase of the industrial fund, and Fan Bing, the director of the first phase of the industrial fund, also serves as the supervisor of the second phase of the industrial fund. In addition, Huaxin Investment Management Co., Ltd., as the fund manager, manages the first phase of the industrial fund and the second phase of the industrial fund according to their respective entrustment management agreements. According to the principle of substance over form, the second phase of the industrial fund is a related party of the company.

The second phase of the industrial fund holds 72,011,521 shares of the company, accounting for 2.62 of the total share capital of the company. In addition, there is no other relationship with the company in terms of property rights, business, assets, debts, personnel, etc.

3, Fenshui capital basic situation.

(1) Enterprise Name: Taiyuan Fenshui Capital Management Co., Ltd.

(2) Type of enterprise: limited liability company (wholly state-owned)

(3) Domicile: B, Wanda Center, 175 Jiefang North Road, Julun Street, Xinghualing District, Taiyuan City, Shanxi Province

Seat 35 floor

(4) Legal representative: Zhang Yidong

(5) Registered capital: 5,000 million yuan

(6) Major shareholders: Taiyuan Municipal Finance Bureau holds 100 shares

(7) Date of establishment: March 12, 2024

(8) Scope of business: General items: investment activities with own funds;

Asset management services; business management; financial advisory; socio-economic advisory services (except in accordance with the law

Except for projects subject to approval, business activities shall be carried out independently according to law with business license)

(9) Key financial data for the most recent fiscal year: Fenshui Capital was established in March 2024,

No financial data is available.

There is no relationship between Fenshui Capital and the company in terms of property rights, business, assets, debts and personnel.

Basic information on 3. investment targets

(I) of the subject company

(1) Enterprise Name: Taiyuan Jinke Silicon Material Technology Co., Ltd. (tentative name, specific to market supervision

The name approved by the supervision and management department shall prevail)

(2) Place of registration: Taiyuan City, Shanxi Province

(3) Registered capital: 5,500 million yuan

(4) Shareholding structure:

Name of shareholder Capital contribution Shareholding ratio Capital contribution period

(RMB ten thousand yuan) way

Shanghai Xinsheng Semiconductor Technology Has 280,000 50.91% Currency 2025-6-30

Limited company or its subsidiaries

National IC Industry Investment 150,000 27.27% Currency 2025-6-30

Fund Phase II Co., Ltd.

Taiyuan Fenshui Capital Management has 120,000 21.82% currency 2025-6-30

Limited company or its subsidiaries

Total 550,000 100.00%-

Manufacturing of electronics-specific materials; sales of electronics-specific materials; research and development of electronics-specific materials; electronics

Component manufacturing; other electronic device manufacturing; integrated circuit manufacturing; integrated circuit sales;

Technical services, technology development, technology consultation, technology exchange, technology transfer, technology promotion;

Import and export of goods; technology import and export; business management consulting; machinery and equipment leasing. (except by law

In addition to the projects subject to approval, the business license shall be used to carry out business activities independently in accordance with the law). (specifically

subject to approval by the market supervision and management department)

Basic information on the construction projects to be invested by the (II)

Taiyuan Jinke Silicon Material Technology Co., Ltd. will mainly engage in 300mm semiconductor silicon wafer business and implement the Taiyuan project to upgrade the production capacity of 300mm silicon wafers for integrated circuits. The project is expected to have a total production capacity target of the construction of crystal production.

Can 600000 pieces/month (including heavy doping), cutting, grinding and polishing capacity of 200000 pieces/month (including heavy doping), and promote 300mm silicon

The chip technology is constantly upgraded and iterated to meet the process needs of different technology nodes in China.

Basic information on the subject matter of 4. related parties and related transactions.

Among the investors involved in this investment, the second phase of the Industrial Fund intends to contribute 1,500 million yuan in currency. In view of the fact that the first phase of the industrial fund is a major shareholder holding more than 5% of the company's shares, and the directors of the first phase of the industrial fund Zhang Xin, Yan Jianqiu, Yang Gaofeng, Tang Xuefeng and Li Guohua also serve as the directors of the second phase of the industrial fund, and Fan Bing, the director of the first phase of the industrial fund, also serves as the supervisor of the second phase of the industrial fund. In addition, Huaxin Investment Management Co., Ltd., as the fund manager, manages the first phase of the industrial fund and the second phase of the industrial fund according to their respective entrustment management agreements. According to the principle of substance over form, the second phase of the industrial fund is a related party of the company.

The subject company funded by related parties has not yet completed the industrial and commercial registration procedures, and the final approval of the local market supervision and administration shall prevail.

5. Related Transaction Pricing

All investors in this foreign investment have contributed in the form of equivalent cash, following the market-oriented principles of fairness, openness and impartiality, and there is no harm to the interests of the company and all shareholders, especially small and medium shareholders.

Main contents and performance arrangements of the related transaction agreement to be signed by the 6.

Through friendly consultation, the parties intend to sign an investment agreement on this cooperation. The main contents are as follows:

1. Registered capital

The total registered capital of the subject company is RMB 5,500 million.

2. Capital contribution

The first paid-in capital contribution is 50% of the registered capital, I .e. RMB 2,750 million, which shall be paid by all parties according to its

The proportion of subscribed capital contributions shall be synchronized and paid in the same proportion, and the best efforts shall be made to complete the first payment within 15 working days from the date of completion of the registration of the establishment of the target company.

The remaining registered capital of the target company, that is, RMB 2,750 million, shall be paid in at the same time and in the same proportion according to the proportion of their subscribed capital contribution, and shall do their best to complete the actual payment within 15 working days from the date of receipt of the payment notice issued by the target company on the remaining registered capital.

The paid-in capital contribution of the second phase of the industrial fund and Taiyuan investors shall also be based on the premise that the current paid-in capital contribution of Shanghai Xinsheng has been fully paid. If Shanghai Xinsheng fails to fully pay the paid-in capital contribution on time, the second phase of the industrial fund and Taiyuan investors shall have the right not to pay the capital contribution and shall not bear any liability for breach of contract.

3. Shareholders' meeting, board of directors, board of supervisors, management

The parties agree that the Company shall establish a shareholders' meeting, which is the highest authority of the Company. The shareholders' meeting of the subject company shall be composed of all parties, and the shareholders shall exercise their voting rights in proportion to their contributions.

All parties agree that the company shall establish a board of directors, and the board of directors of the company shall be responsible to the shareholders' meeting. The board of directors is composed of 5 directors. Shanghai Xinsheng has the right to nominate 3 director candidates, the second phase of the Industrial Fund has the right to nominate 1 director candidate, and Taiyuan Investors has the right to nominate 1 director candidate. The chairman of the board of directors is elected by the members of the board of directors from among the directors nominated and elected by the controlling shareholders, and is the legal representative of the company after being elected by a majority of the board of directors.

All parties agree that the company shall establish a board of supervisors. The Supervisory Board consists of three supervisors. Among them, the second phase of the Industrial Fund has the right to nominate a non-employee supervisor candidate, Taiyuan Investor has the right to nominate a non-employee supervisor candidate, and the other supervisor is an employee representative. The employee supervisors shall be elected by the employees of the company through the employee representative assembly, the employee assembly or other forms of democratic election.

The subject company was established with a general manager, a number of deputy general managers and a financial officer. The controlling shareholder has the right to nominate the general manager and the general manager to nominate the deputy general manager and the person in charge of finance.

4. Each Party hereby warrants to the other Party that such Party:

(1) An enterprise or entity that is lawfully organized, validly existing, and operating in accordance with the laws of the place of incorporation;

(2) have the full right, power and authority to execute and deliver this Agreement and to comply with and perform its obligations under this Agreement;

(3) has taken all appropriate and necessary corporate acts to authorize the execution and delivery of this Agreement and to authorize

the right to perform and comply with the terms of this Agreement;

(4) Except as otherwise agreed in this Agreement, all necessary consents, approvals and authorizations have been obtained for the effective execution and performance of this Agreement;

(5) As of the date of this Agreement, there are no laws, regulations, regulations, judgments or administrative orders and binding agreements that prevent, conflict with or in any way affect the signing or delivery of this Agreement;

(6) The execution and performance of this Agreement will not violate or cause a violation of any organizational document of the company (if applicable) or any applicable law, system or regulation of any government agency, or any agreement or arrangement to which it is a party or bound by it, or any applicable order, judgment or decree (as the case may be).

5. Each Party undertakes to the other Parties:

(1) To perform and comply with the provisions of this Agreement and to ensure, within its capacity, that the Subject Company acts in accordance with the provisions of this Agreement;

(2) to take all necessary measures to give full effect to the provisions of this Agreement, and to carry out all activities reasonably necessary or necessary to achieve the spirit and intention of this Agreement and the Articles of Association;

(3) Use reasonable efforts to ensure that any necessary third party enters into and performs further agreements, documents, warranties, acts and matters reasonably required by written notice from either party to the contract in order to give full effect to the terms of this Agreement;

(4) Without prejudice to the foregoing general provisions, exercise or ensure that their temporary representatives exercise or refrain from exercising any voting rights at any meeting of the parties or board of directors to ensure the passage of necessary or necessary resolutions to deal with the subject company in accordance with this agreement; and otherwise implement the above provisions and requirements to ensure that there are no resolutions inconsistent with such provisions and requirements.

6. Shanghai Xinsheng undertakes to other parties and agrees:

(1) Include the construction progress and strategic objectives of the 300mm wafer capacity upgrade Taiyuan project in the performance appraisal of the Shanghai Xinsheng management team;

(2) To ensure that the subject company reasonably and fairly establishes a system of connected transactions between the subject company and Shanghai Xinsheng and other entities under its control, which shall be strictly implemented by the subject company within 30 days after the establishment of the subject company and approved by the Board of Directors;

(3) Shanghai Xinsheng will allocate orders and production capacity for silicon wafer products between the subject company and its other subsidiaries on a fair basis;

(4) Shanghai Xinsheng shall not abuse the rights of shareholders to the detriment of the legitimate rights and interests of the subject company, Taiyuan investors and Industrial Fund II;

(5) On the premise of ensuring normal production and operation, the target company will actively carry out the verification and import of key equipment and materials from domestic manufacturers, and gradually increase the application proportion of domestic key equipment and materials.

The necessity of 7. foreign investment and its impact on listed companies.

The company's wholly-owned subsidiary Shanghai Xinsheng or its subsidiary and industrial fund phase ii, Fenshui capital or its subsidiary jointly set up a holding subsidiary to implement the Taiyuan project of upgrading the production capacity of 300mm silicon wafers for integrated circuits. it is a major decision made based on the company's business development and strategic needs and based on the company's experience in research and development and manufacturing in the semiconductor silicon wafer business field, especially the 300mm semiconductor silicon wafer business field. Shanghai Xinsheng or its subsidiaries, as the controlling shareholder of the target company, will, with the support of all parties, concentrate superior resources and obtain financial support to speed up the production capacity construction and technical capacity improvement of 300mm semiconductor silicon wafers. in order to further enhance the company's market share, consolidate the domestic leading position and expand its advantages, and have a positive impact on the company's future financial situation and operating results, in line with the company's future development plan.

The source of funds for this foreign investment is the company's own funds or self-raised funds, which will not adversely affect the normal production and operation of the company, and there is no situation that harms the interests of the listed company and all shareholders.

Risk Analysis of 8. Foreign Investment

1. The establishment of the target company still needs to obtain the approval of the local market supervision and administration bureau, and there is a certain degree of uncertainty.

2. During the implementation of the project, it may be affected by many factors such as changes in the international environment, changes in macro policies, market changes and technological progress. The project may have certain market risks, operational risks and management risks. The Company will pay full attention to changes in the industry, market and technological development, give full play to its overall advantages, dynamically assess risks and simultaneously adjust risk response strategies to ensure the healthy and sustainable development of the target company.

3. The company will continue to improve the corporate governance structure of the proposed company, establish and improve the internal control process and effective supervision mechanism, optimize the overall resource allocation of the company, and prevent and reduce the risk of foreign investment.

Please the majority of investors rational investment, pay attention to investment risk.

Procedures for consideration of 9. related transactions

On June 11, 2024, the company held the 20th meeting of the second board of directors, and deliberated the proposal on the establishment of holding subsidiaries by subsidiaries to implement Taiyuan project. Yang Zhuo and Yuan Jiancheng, the related directors, avoided voting, and the non affiliated directors attending the meeting voted unanimously. The above motion is still to be submitted to the company's shareholders' meeting for consideration.

All independent directors of the company issued prior approval opinions on the matter, and expressed clear independent opinions on the board of directors: the company this time through its wholly-owned subsidiary Shanghai Xinsheng Semiconductor Technology Co., Ltd. or its subsidiaries and the National Integrated Circuit Industry Investment Fund Phase II Co., Ltd., Taiyuan Fenshui Capital Management Co., Ltd. or its subsidiaries jointly invested in the establishment of a holding subsidiary to implement the 300mm silicon chip capacity upgrade Taiyuan project for integrated circuits, it is a major decision based on the company's business development and strategic needs, based on the company's experience in the semiconductor silicon wafer business, especially the 300mm semiconductor silicon wafer business. Among them, the related party National Integrated Circuit Industry Investment Fund Phase II Co., Ltd. and each investor contributed in the form of equivalent cash, following the market-oriented principles of fairness, openness and impartiality, and there is no harm to the interests of the company and all shareholders, especially small and medium shareholders. Therefore, we unanimously agree that the wholly-owned subsidiary Shanghai Xinsheng Semiconductor Technology Co., Ltd. or its subsidiaries and the National Integrated Circuit Industry Investment Fund Phase II Co., Ltd., Taiyuan Fenshui Capital Management Co., Ltd. or its subsidiaries jointly invest Set up a holding subsidiary to implement the Taiyuan project of upgrading the production capacity of 300mm silicon wafers for integrated circuits, and agreed to submit the proposal to the company's shareholders meeting for deliberation.

Opinions of 10. Intermediaries

Upon verification, the sponsor believes that:

The matter of foreign investment and related party transaction has been deliberated and approved by the board of directors of the company, the related directors have avoided voting, and the independent directors have expressed their prior approval opinions and independent opinions in agreement with the above transaction, which will be submitted to the general meeting of shareholders for deliberation, the decision-making procedure complies with the "Shanghai Stock Exchange Listed Companies Self-Regulatory Guidelines No. 11-Continuous Supervision", "Shanghai Stock Exchange Science and Technology Innovation Board Stock Listing Rules", "Shanghai Stock Exchange Science and Technology Innovation Board Listed Companies Self-Regulatory Guidelines No. 1-Standardized Operation", "Articles of Association" and the company's related transaction management system and other relevant regulations; this related transaction is based on the company's management needs, and the pricing of related transaction follows the principle of marketization, there are no circumstances that are detrimental to the interests of the Company and non-affiliated shareholders. The sponsor has no objection to the company's foreign investment and related party transactions, and the foreign investment and related party transactions need to be deliberated and approved by the general meeting of shareholders of the company before they can be implemented.

It is hereby announced.

Board of Directors of Shanghai Silicon Industry Group Co., Ltd.

June 12, 2024