Behind the $2.6 billion raised by GE Core IPO: the 10 billion Chengdu project is still shutting down and its equity has changed.

Recently, semiconductor enterprise lattice core Global Foundries (GFS.US) IPO financing and the emergence of continuous breakage, attracted the attention of the industry.

As the world's fourth largest wafer foundry, GE Core also has investment in China, when it plans to invest US $10 billion (about 70 billion yuan) in Chengdu to build the first 12-inch wafer production line in the southwest. But it fell into a "bad end".

Today, the successful IPO, financing of GE Core is as high as 2.6 billion US dollars. Can the problems left over by the GE Core Chengdu project be solved? Can the Chengdu municipal government claim be successful? A reporter from Science and Technology Innovation Board Daily went to the scene again for an interview.

At the scene, the marks of seals can still be seen in the grid core Chengdu project, and the signs of desertion of the front door of the office building are even more obvious. A person working inside the project told Science and Technology Innovation Board Daily that the project is still in a state of suspension, with only about seven greening workers and five people cleaning.

A reporter from the Science and Technology Innovation Board Daily learned from the bondholders of the GE Core Chengdu project that GE Core Chengdu officially announced the suspension of work in May 2020, and a major equity change took place in 2021. "the equity change of GE Core is expected to promote the further implementation of the project. The competent government departments and implementing units have responded actively, seeking new partners and project transformation plans, and are now negotiating cooperation details with new investors. It is expected that the rectification and construction of the project will be officially launched in January 2022. "

GE Core (Chengdu) has changed its name to Chengdu High-tech Zone IC Industry Co., Ltd in 2021. Tianyan survey data show that Chengdu High-tech Integrated Circuit Company has two shareholders, namely Chengdu High-tech Investment Group and Chengdu Construction Engineering Group. Behind the equity penetration, there are Chengdu High-tech Zone Finance and Finance Bureau, Chengdu State-owned assets Supervision and Administration Commission and so on.

It is worth mentioning that at the beginning of the establishment of the grid core project, Chengdu High Investment Corporation is the main body of implementation, and the project is promoted by the government of Chengdu High-tech Zone.

A reporter from Science and Technology Innovation Board Daily noted that in 2017, GE Core plans to invest 10 billion US dollars (about 70 billion yuan) to build a 12-inch wafer production line in Chengdu to build the first 12-inch wafer production line in southwestern China. The Chengdu municipal government has successively allocated nearly 7 billion yuan through relevant implementers and contractors to be responsible for the construction, research and development, operation and later team formation of the plant and supporting facilities.

Rumors abound from the receiving party that Intel has come to inspect it.

Prior to this, there were numerous rumors about the takeover side of the core Chengdu project. Chengdu Gaozhen Technology, Intel and Hynix have all expressed their intention to take over the Chengdu grid core project.

"Science and Technology Innovation Board Daily" reporter learned that Intel has indeed come to inspect, but for the follow-up progress, the relevant people said they did not know.

At present, Chengdu Gexin project is heavily in debt, including suppliers 833644.OC (Witron), Lianhua Linde Gas (Chengdu) and other project funds, as well as default indemnities and so on. According to the prospectus, GE Core was claimed by the Chengdu municipal government on April 26 this year. GE Core is in negotiations with the Chengdu high-tech municipal government, and GE Core has set aside $34 million for the settlement.

In fact, Chengdu high-tech investment in the grid core project is much more than this. Earlier, media reported that the Chengdu municipal government invested nearly 7 billion yuan in the grid core Chengdu project and plant construction, of which 522 million yuan was actually contributed and 6.404 billion yuan was built. It includes investment in the project by high-tech investment, Chengdu Construction Engineering Group and Chengdu Gaoxin.

With regard to the question of whether there is a receiving party and who the receiving party is, a person close to Chengdu High Investment Corporation only said that it is currently in negotiations with the receiving party, there is no official result, and it is in the confidential stage.

A long-term observer of the chip industry told Science and Technology Innovation Board Daily that because of abandoning the 7nm wafer process in 2018 and failing to keep up with the mainstream route FINFET, GE Core once fell into operational difficulties. As a result, GE Core has embarked on the road of "stripping assets and slimming down" for several years. Nowadays, IPO, aims to seize the opportunity of "chip supply falling short of demand" to finance and expand production under the tuyere of "chip shortage".

Tom Caulfield, CEO of GE Core, said recently that the company's capacity has been insufficient since August 2020, with capacity utilization exceeding 100%, and all capacity has been sold out by the end of 2023. Caulfield had previously said that of the $2.6 billion raised, $1.5 billion would be spent on capital expenditure to increase capacity and meet demand.

GE core Global Foundries shares closed at $56.42, or 4.73%, at the close of trading on Nov. 2, after the company's shares fell into a breakout situation.