(Yicai) May 28 -- Defu Technology's shares soared after the Chinese company said it plans to spend about CNY3.1 billion (USD457.3 million) building a factory for high-end artificial intelligence electronic circuit copper foil in Jiujiang.

Defu [SHE: 301511] closed up 13.5 percent at CNY119.52 (USD17.63) a share today. Shenzhen's tech-focused ChiNext Index climbed 2 percent.

Defu will ink a deal with the management committee of Jiujiang National Economic and Technological Development Zone to build the plant with an annual capacity of 50,000 tons there, the Jiangxi province-based company announced yesterday. The factory will be implemented within the firm's subsidiary Jiujiang Amber New Materials.

The spending included around CNY2.1 billion in fixed asset investment and the rest for working capital supporting future operations, Defu noted. The new plant will help meet customer and market demand, upgrade the supply chain, and further enhance the company's competitiveness in the high-end copper foil market, it pointed out.

Defu will use its self-owned funds, bank loans, and other financing methods for the project, which are expected to exert certain pressure on its finances, it said. The expansion of the high-end AI electronic circuit copper foil output carries various risks, including absorption of new capacity, technological iteration, and management challenges, it added.

Established in 1985, Defu focuses on the research, development, production, and sales of high-performance lithium battery copper foil and electronic circuit copper foil, with its products widely used in new energy vehicles, consumer electronics, fifth-generation mobile communication technology, and AI servers, serving Contemporary Amperex Technology, LG Chem, BYD, and other clients. It led the world with an annual production capacity of 191,000 tons last year.

Editor: Martin Kadiev