On March 10, Tianfu Energy announced that it planned to acquire 10 million shares of Beijing Tianke Heda Semiconductor Co., Ltd., a silicon carbide wafer company.The purchase price is 25 yuan per share, and the total transaction amount is 250 million yuan.

According to "Three Generations and a Half Wind Direction", this is the third time Tianfu Energy has acquired Tianke Heda shares, with a cumulative subscription amount of nearly 600 million yuan. also,Huawei, BYD and China Resources MicroelectronicsOther companies have also invested in Tianke Heda. From 2016 to 2021, Tianke Heda’sThe valuation increased from 110 million yuan to 5.4 billion yuan, an increase of approximately 53 times.In addition, Tianfu Energy believes that,The annual domestic demand for silicon carbide substrates exceeds 1.1 million pieces, and demand currently exceeds supply.      

Tianfu Energy invested in Tianke Heda for three times

Huawei, BYD and China Resources Microelectronics have invested in shares

As of the signing date of the agreement, Tianke Heda’s equity structure is as follows:

After the completion of this acquisition, Tianfu Energy's shareholding ratio will increase by 4.63%, and its total shareholding will reach approximately 10.66%, making it the second largest shareholder of Tianke Heda. Tianfu Group, the controlling shareholder of Tianfu Energy, is the largest shareholder of Tianke Heda, holding approximately 13.62% of the shares.
 

The announcement shows that Tianke Heda is a silicon carbide wafer manufacturer. In 2019, Tianke Heda's operating income was 155 million yuan and its net profit was 30.0432 million yuan.

"Three Generations and a Half Wind Direction" combined multiple announcements and found that Tianfu Energy has invested nearly 600 million yuan to acquire Tianke Heda shares. On December 4, 2020, Tianfu Energy invested 200 million yuan to participate in Tianke Heda's capital increase and subscribed for 8 million shares of Tianke Heda; on January 11, 2021, Tianfu Energy invested another 125 million yuan to acquire 5 million shares of Tianke Heda. Interestingly, Tianfu Energy’s announcement shows that the overall valuation of Tianke Heda in 2016 was 117 million yuan, and by 2021, the overall valuation of Tianke Heda will be approximately 5.4 billion yuan, an increase of 5300%.

Tianke Heda's valuation increased from 117 million yuan to 5.4 billion yuan

In addition to Tianfu Energy, in 2019, Hubble Technology, a subsidiary of Huawei, teamed up with two other companies to subscribe for Tianke Heda shares for about 127 million yuan. Downstream application parties such as BYD and China Resources Microelectronics (Runke Fund) will also participate in Tianke Heda's capital increase in 2020.

Annual demand exceeds 1.1 million pieces

Domestic silicon carbide substrates are in short supply?

Tianfu Energy stated in the announcement that the current total annual demand for line-pair conductive substrates for power electronic devices built in China is about 1 million pieces. Tianke Heda's annual production capacity of this type of products is only 80,000 pieces, which is in short supply. At the same time, with the rapid development of 5G, the global demand for semi-insulating substrates is approximately 100,000 pieces per year, and China's demand exceeds 50,000 pieces per year. The domestic market is currently in short supply. On December 27, 2019, Jiangsu Tianke Heda Semiconductor Project was successfully completed and put into production. The project has a total investment of 500 million yuan and can achieve an annual output of 60,000 4- to 8-inch silicon carbide substrates.

Tianke Heda commissioning ceremony

In July 2020, Tianke Heda submitted an IPO application to the Science and Technology Innovation Board, raising 500 million yuan, and planned to build a new production base with an annual output of 120,000 6-inch silicon carbide wafers, including approximately 82,000 6-inch conductive silicon carbide wafers and approximately 38,000 6-inch semi-insulating silicon carbide wafers. However, Tianke Heda's IPO application was reviewed and terminated in October of the same year.

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