HG Semiconductor Limited ("HG Semiconductor"; 06908.HK) issued an announcement on March 24, 2022, that it had entered into a non-legally binding Memorandum of Understanding with GUH Holdings Berhad ("GUH"; 03247.KL) and a strategic cooperation agreement with Cogobuy Group ("Cogobuy"; 00400.HK).

Reinforcing Domestic and Overseas Cooperation to Drive GaN Business

GUH is a Malaysia-listed company focused on the manufacturing of printed circuit boards. The reciprocal cooperation agreement between HG Semiconductor and GUH will expand HG Semiconductor's income stream from sales of its fast-charging batteries and gallium nitride (GaN) products in Malaysia and Southeast Asia, and provide construction plans and equipment procurement for a battery cell factory for GUH, alongside full modular equipment for GUH's 100MWh energy storage station.

Cogobuy is a leading enterprise service platform; its subsidiary Comtech is a well-known e-commerce platform for trading integrated circuits and other electronics components. Comtech offers chip application design solutions and marketing services by connecting hundreds of upstream high-end chip suppliers with downstream Artificial Intelligence of Things companies. The agreement between HG Semiconductor and Cogobuy includes the support of Cogobuy that will boost HG Semiconductor's efforts to sell its homegrown chips in China and facilitate a long-term strategic partnership for chip development and applications.

HG Semiconductor Limited (06908.HK) is engaged in the design, development, manufacturing, subcontracting, and sales of new generation semiconductor GaN-related products. The strategic cooperation agreements with GUH and Cogobuy are the product of the Group's two-pronged business strategy involving the development of fast-charging products and applications and growing HG Semiconductor's chip sales by expanding its sales channels.

Expanding Market with Huge Potential

According to the Qianzhan Industrial Research Institute, the market and material penetration rate for GaN products will continue to grow globally, following year-on-year growth of 28.67% from 2018 to 2020 that saw the market's value top US$18.4 billion. The market is expected to be worth US$42.3 billion by 2026, with a compound annual growth rate of approximately 13.5%.In terms of market penetration, silicon (Si) remains the dominant material used in semiconductors, while GaN is in a development phase with a bright outlook. GaN outperforms silicon, reducing the size and weight of products in which it is used, thanks to its higher current and voltage rating, helping to accelerate intensive research and development and its range of applications.

Greater China's Leading Supplier of Third-generation GaN Semiconductors

HG Semiconductor's progress in the GaN sector has laid solid foundations for its emergence as a leading market player. The company officially changed its name to "HG Semiconductor Limited" on October 8, 2021, signifying its determination to excel in the third-generation semiconductor industry and focus on GaN. On August 25, 2021, it announced that its wholly-owned subsidiary FastSemi Holding Limited had invested in Israel's VisIC Technologies Limited ("VisIC"), one of the world's leading GaN semiconductor device makers, and that it had been working with the suppliers of leading automakers such as Mercedes-Benz and Rolls-Royce. On November 25, 2021, FastSemi Holding announced its investment in GaN Systems Inc ("GaN Systems"), a global leader in GaN technology based in Canada. GaN Systems, whose shareholders include BMW i Ventures and Fidelity, has gained an absolute advantage in supplying components for Apple's fast chargers. Thanks to its investments in VisIC and GaN Systems, two top players in the GaN sector, HG Semiconductor is set to become a third-generation semiconductor GaN solution provider to major electric vehicle manufacturers, including state-owned and emerging electric car manufacturers.

HG Semiconductor's cooperation agreements with GUH and Cogobuy, which are engaged in developing and selling GaN products, enable it to leverage existing platforms and resources, and demonstrate its growing profile in the GaN industrial chain.

About HG Semiconductor Limited

HG Semiconductor Limited (6908.HK) is principally engaged in semiconductor product business in China, including the design, development, manufacturing, subcontracting services and sales of semiconductor products, including light-emitting diode ("LED") beads and a new generation of semiconductor gallium nitride ("GaN") chip, GaN components and related application products, as well as fast charging products. Leveraging its industry expertise in LED manufacturing, the Group is committed to accelerating its research and development and expansion in the application of GaN related products, with an aim to become a leading semiconductor company with the integration of design, manufacturing and sales of semiconductor chips, as well as providing total solutions with higher efficiency and competitive system cost.

For more information, please visit www.hg-semiconductor.com