HG Semiconductor Limited — Capital/Financing Update 2021

Dec 1, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company.

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HG SEMICONDUCTOR LIMITED 宏 光 半 導 體 有 限 公 司

(formerly known as HongGuang Lighting Holdings Company Limited 宏光照明控股有限公司)

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 6908)

COMPLETION OF PLACING OF NEW SHARES UNDER GENERAL MANDATE

Placing Agent

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VC Brokerage Limited

Reference is made to the announcement of HG Semiconductor Limited (the ‘‘Company’’) dated 4 November 2021 in relation to, amongst other matters, the Placing under the General Mandate (the ‘‘Announcement’’). Unless otherwise defined, capitalised terms used herein shall have the same meanings as those defined in the Announcement.

COMPLETION OF THE PLACING

The Board is pleased to announce that all the conditions set out in the Placing Agreement have been fulfilled and the completion of the Placing took place on 1 December 2021 in accordance with the terms of the Placing Agreement. An aggregate of 14,346,000 Placing Shares, representing approximately 2.55% of the issued share capital of the Company immediately after completion of the Placing, have been successfully placed to not less than six Placees at the Placing Price of HK$6.20 per Placing Share.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, (i) each of the Placees and, where appropriate, their respective ultimate beneficial owners are independent third parties and not connected with the Company and its connected persons; and (ii) none of the Placees has become a substantial Shareholder of the Company immediately upon completion of the Placing.

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USE OF PROCEEDS

The net proceeds from the Placing, after deduction of the professional fee and other related expenses, amounted to approximately HK$86.2 million. The Company intends to apply the net proceeds from the Placing as follows:

• (i) as to approximately HK$64.3 million for strengthening research and development capabilities of LED, Mini LED, fast charging, GaN devices and related semiconductor products, which includes setting up of research and development centers, recruitment of research and development professionals, and the procurement of equipments and materials with an aim to develop and/or capture patent and technology; and

• (ii) as to approximately HK$21.9 million for provision of general working capital and improving the financial position of the Group.

EFFECT ON SHAREHOLDING STRUCTURE OF THE COMPANY

The shareholding structure of the Company (i) immediately before completion of the Placing and (ii) immediately after completion of the Placing are set out below:

Shareholders First Global Limited, Star Eagle Enterprises Limited and Bigfair Enterprises Limited (Note 1) GSR Capital Special Opportunity Fund L.P. (‘‘GSR’’) (Note 2) Great Ocean Prime Holding Limited (‘‘Great Ocean’’) (Note 3) Public Placees Other public Shareholders Total	Immediately before completion of the Placing Number of Shares Approximate % of shareholding 300,000,000 54.62% 56,000,000 10.20% 24,000,000 4.37% — — 169,245,000 30.81% 549,245,000 100.0%	Immediately after completion of the Placing Number of Shares Approximate % of shareholding 300,000,000 53.22% 56,000,000 9.94% 24,000,000 4.26% 14,346,000 2.55% 169,245,000 30.03% 563,591,000 100.0%	Immediately after completion of the Placing Number of Shares Approximate % of shareholding 300,000,000 53.22% 56,000,000 9.94% 24,000,000 4.26% 14,346,000 2.55% 169,245,000 30.03% 563,591,000 100.0%
			100.0%

Notes:

1. The aggregate 300,000,000 Shares consist of (i) 100,500,000 Shares held by First Global Limited, a company wholly owned by Mr. Zhao Yi Wen; (ii) 100,500,000 Shares held by Star Eagle Enterprises Limited, a company wholly owned by Mr. Lin Qi Jian; and (iii) 99,000,000 Shares held by Bigfair Enterprises Limited, a company wholly owned by Mr. Chiu Kwai San. On 8 June 2016, Mr. Lin Qi Jian, Mr. Zhao Yi Wen and Mr. Chiu Kwai San entered into the

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concert parties confirmatory deed to acknowledge and confirm, among other things, that they are parties acting in concert with each other, and therefore First Global Limited, Star Eagle Enterprises Limited and Bigfair Enterprises Limited are deemed to be interested in the 300,000,000 Shares together under the SFO.

1. GSR is an exempted limited partnership with GoldenSand Capital Ltd (‘‘GoldenSand’’) (a company which is wholly owned by Sonny Wu and being the general partner of GSR) and Sonny Wu (being the limited partner of GSR) holding 50% and 50% of the total capital contribution to GSR respectively, and therefore GoldenSand and Sonny Wu are deemed to be interested in the 56,000,000 Shares held by GSR under SFO.

2. Great Ocean is a company wholly owned by Liou Jr-Liang and therefore Liou Jr-Liang is deemed to be interested in the 24,000,000 Shares held by Great Ocean under SFO.

LATEST BUSINESS DEVELOPMENT

The Group has been developing its business by leveraging its industrial expertise on semiconductors manufacturing and has been expanding its business to various kinds of semiconductors including GaN related products. In view of the Group’s long term strategy in further developing its business in the GaN semiconductor industry, the Board of Directors of the Company is pleased to announce that, the Group is setting up a new factory in the Xuzhou Economic and Technological Development Zone which comprise of 7000 square meters ultra clean chambers and 850 square meters office area (the ‘‘Xuzhou Factory’’). It is contemplated that a production line for manufacturing electronic products including GaN related products will be installed in the factory the facilities of which will be further upgraded to full automation in the future.

Further, in preparation for further developing and exploring the GaN semiconductor business, the Group is pleased to introduce core members of the research and development team of the Group whose biographies are as follows:

Dr. Chen Zhen

Dr. Chen Zhen (‘‘Dr. Chen’’) is the core expert in the GaN semiconductor business and the general manager of the Xuzhou Factory. He graduated from Sichuan University, Sichuan, China, with a bachelor’s degree and master’s degree in semiconductor physics and devices and condensed state physics, respectively. Thereafter, he received the Ph.D. degree from the Institute of Semiconductor, Chinese Academy of Sciences, Beijing, China, in 2002.

Dr. Chen has over 20 years of experience in research, development, production and management in the field of GaN-based optoelectronics devices. He has mastered the core technologies of GaN electronic devices and full-band solid-state light-emitting devices as well as proprietary technology of 8-inch silicon-based GaN epitaxial growth. He had been a Research Fellow with Singapore-MIT Alliance, a Postdoctoral Fellow with the University of South Carolina, and an Associate Project Scientist with University of California at Santa Barbara, where he had also worked with Nobel Prize winner Professor Shuji Nakamura and Professor Umesh Mishra, a member of the American Academy of Engineering, in relation to the performance of GaN high electron mobility transistor developed by the University of California, and researched GaN based ultraviolet to visible LED design, growth and characterization, applications in high-power, high frequency electronics.

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Between 2009 and 2012, he worked at Bridgelux Inc., a leading developer and manufacturer of LED lighting technologies and solutions. He had initiated the LED/Silicon (Si) research and development in the company and demonstrated the first working high power LED-on-Si with light output power as 50% bright as the best LED-on-sapphire. He had also led the epitaxy (Epi) development in project ‘‘Flipchip LED development’’ and achieved LED with wall plug efficiency (WPE) higher than DA1000, the best commercial flip-chip LED from Cree, a market-leading innovator of lighting-class LEDs, LED lighting, and semiconductor solutions for wireless and power applications. Dr. Chen also held a core management and technical position in Nanchang Lattice Power Corporation where he was involved in the production of silicon-based GaN whereby the team won the first prize of China’s National Science and Technology Innovation Award in 2015.

Dr. Chen has been the vice president of a well-known semiconductor company in the United States of America, where he is engaged in the research, development and production of GaN-based external devices.

He has authored or coauthored three bookchapters, over 50 peer reviewed papers and 20 conference proceedings. He has applied for more than 30 domestic and foreign patents. He has served as a reviewer for more than 10 international journals. He is also a senior member of the Institute of Electrical and Electronics Engineers (‘‘IEEE’’) Photonics Society, and a senior member of the IEEE Electronic Devices Association. His current research interests include III-nitride-based electronic devices, optical devices with wavelength from red to deep ultraviolet.

Mr. Lu Juilin

Mr. Lu Juilin (‘‘Mr. Lu’’) is the operation deputy general manager of the Xuzhou Factory. He graduated from National ChengKong University. He has over 30 years of experience in semiconductor industry and foundry technology and management, with experience in managing 8 to 12-inch fab management and technical experience and 55 nm to 0.5 um chip manufacturing process factory management experience. Mr. Lu also has experience in building new factories. He worked as factory manager of Semiconductor Manufacturing International Corporation (SMIC, stock code: 981) and Hua Hong Semiconductor Limited (HHS, stock code: 1347).

Dr. Chang Ru Gin

Dr. Chang Ru Gin (‘‘Dr. Chang’’) is the senior consultant of the Group. Dr. Chang obtained a doctor of philosophy in Electrical Engineering from Southern Methodist University in the United States and a master’s degree in Engineering Science from the State University of New York. He is the founder and the former CEO of Semiconductor Manufacturing International Corporation. He is one of the leading figures of the semiconductor industry and an industry leader of the PRC semiconductor market. In 1997 Dr. Chang joined Worldwide Semiconductor Manufacturing Corp and was appointed as its president from 1998 to 1999. Before the said appointment, he worked for 20 years at Texas Instruments Incorporated, where he established and managed technology development and operations for ten semiconductor factories and integrated circuit business in the United States, Japan, Singapore, Italy and Taiwan.

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Dr. Thomas Hu

Dr. Thomas Hu (‘‘Dr. Hu’’) is the research deputy general manager of the Xuzhou Factory. Dr. Hu graduated from University of Science and Technology of China with a B.S. degree, and obtained his doctor of philosophy degree from a renowned University in United States. With more than 20 years’ work experience in GaN device design and fabrication in the world’s leading company, he was the key member in GaN HEMT device design and fabrication. Beside his advanced GaN device process technologies, he is experienced in semiconductor process control, fab operation and management. He is in charge of new process recipe development, process optimization, new product development, product quality control and yield improvement for GaN HEMT devices and products. He was the Principal Investigator for several GaN HEMT research projects, inventors of several USPTO authorized patents about GaN HEMT device design and fabrication, and had more than 30 SCI papers published in peerreviewed journals.

The Board would like to express the warmest welcome to Dr. Chen, Mr. Lu, Dr. Chang and Dr. Hu. The Board considers that the above engagement will substantially enhance the research and development capabilities of the Group and be beneficial to the development of the Group’s business as a whole.

By order of the Board HG Semiconductor Limited Zhao Yi Wen

Chairman and Executive Director

Hong Kong, 1 December 2021

As at the date of this announcement, the executive Directors are Mr. Zhao Yi Wen, Mr. Lin Qi Jian and Mr. Chan Wing Kin; the non-executive Directors are Dr. Wang David Nin-kou and Mr. Chiu Kwai San; and the independent non-executive Directors are Professor Chow Wai Shing, Tommy, Mr. Wu Wing Kuen, B.B.S. and Mr. Chan Chung Kik, Lewis.

If there is any inconsistency in this announcement between the Chinese and English versions, the English version shall prevail.

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