(Yicai Global) Oct. 17 -- Silan Microelectronics aims to raise CNY6.5 billion (USD903 million) in a private placement of shares, with the funds going to expand its output of vehicle power semiconductors amid strong demand from domestic carmakers.

The designer, manufacturer, and seller of integrated circuits will use most of the funds to finish three projects, and the remainder of CNY1.7 billion will be considered working capital, the Hangzhou-based firm said in a statement recently.

This is one of the company’s core strategic plans in the field of high-end power semiconductors and an important initiative to actively promote the upgrading and transformation of Silan's product structure, it said.

The new energy vehicle market is booming and domestic high-value customers actively purchase China-made chips so Silan is making use of its technical advantages and seizing opportunities to improve its market share and profitability, the firm said.

Silan plans to use CNY3 billion of the proceeds to build a new plant with an annual production capacity of 360,000 units of 12-inch power chips in Hangzhou. Another CNY750 million (USD104 million) will go into expanding the capacity of two kinds of silicon carbide chips used in new energy vehicles by 144,000 chips per year in Xiamen in Fujian province.

Finally, some CNY1.1 billion will be spent on building a semiconductor packaging plant with an annual capacity of 7.2 million automotive power modules in the southwestern city of Chengdu.

Each of the three projects is expected to take three years to complete. The payback period, including those three years, ranges between 5.3 and 6.7 years.

Silan’s stock price [SHA: 600460] climbed 0.6 percent to close at CNY32.35 (USD4.50).

Editor: Emmi Laine, Xiao Yi