(Yicai Global) Dec. 27 -- Shares of Yunnan Lincang Xinyuan Germanium Industry soared by the most allowed in a single day after the company said it will invest CNY624 million (USD89.2 million) building two single-chip wafer plants to meet increasing demand.

The stock price [SHE:002428] of China's largest producer of germanium, the rare semiconductor metal, rose 10 percent to close at CNY9.10 (USD1.30).

Located in the Kunming High-Tech Industrial Development Zone, one plant will make 4-inch indium phosphide single-chip wafers with a planned annual output of 150,000, the Kunming-based company said in a statement yesterday. Costing CNY324 million it should be completed in two years' time.

The other will be a 6-inch solar germanium single-chip wafer production line with an annual output of 200,000. It is scheduled for completion in 18 months.

The move represents a big expansion of Lincang Xinyuan's operations which include a 2-inch indium phosphide line with annual output of 50,000 and a 4-inch germanium monocrystalline wafer line for solar cells, turning out 300,000 units a year.

Germanium wafers are light and strong, making them a suitable alternative to silicon ones in chips. They are increasingly used in solar cells to supply power to space facilities due to their stable performance and high photoelectric conversion rate.

Single-crystal indium phosphide is a new type of semi-insulating wafer that can improve the performance of electronic devices. It is used to make semiconductor and optical fiber communication materials.

The US has the largest germanium reserves and China boasts the highest output of the rare metal.

Editor: Kim Taylor