HG Semiconductor Limited — Capital/Financing Update 2021

Nov 24, 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.

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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)

VOLUNTARY ANNOUNCEMENT INVESTMENT IN GAN SYSTEMS INC.

This is an announcement made by HG Semiconductor Limited (the ‘‘Company’’, together with its subsidiaries, the ‘‘Group’’) on a voluntary basis to keep shareholders and potential investors of the Company informed of the latest business development of the Group.

INVESTMENT IN GAN SYSTEMS INC.

The board (the ‘‘Board’’) of the directors (the ‘‘Directors’’) of the Company is pleased to announce that on 23 November 2021, FastSemi Holding Limited, a wholly-owned subsidiary of the Company (the ‘‘Subsidiary’’), has invested in GaN Systems Inc. (the ‘‘Target Company’’), a leader in gallium nitride (‘‘GaN’’) technology, pursuant to which the Subsidiary has agreed to invest by subscribing for the series F-2 convertible preference shares in the Target Company as a strategic investor at the total consideration of approximately US$1.75 million (the ‘‘Investment’’).

INFORMATION OF THE TARGET COMPANY

Based on the information provided by the Target Company, the Target Company is a company incorporated in Canada and principally engaged in developing a broad range of GaN related products, including high current GaN power semiconductors. The Target Company has an in-depth knowledge in GaN technology and a management team with decades of GaN product experience. The Target Company is a GaN power transistor company currently shipping to automotive, consumer, industrial, and data center customers globally. The customers of the Target Company rely on the Target Company’s GaN power transistors to reduce levels of carbon dioxide emissions and increase the utility and energy efficiency of their power systems.

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The Target Company anticipates a capital funding round to accelerate innovation and adoption of GaN technology across its automotive, consumer, industrial, and enterprise markets. Such capital funding round is led by a multinational renowned strategic investor, and is joined by other investors including a powertrain technologies manufacturer, along with other existing investors including a top tier car manufacturer.

After the Investment, the Group will be able to nominate an independent board observer from Canada to be on the board of the Target Company.

Save for Mr. Sonny Wu, being a director of certain subsidiaries of the Company and a substantial shareholder of the Company who also co-invested in the Target Company for a sum of approximately US$2.0 million and being a global strategic partner of the Target Company, to the best of the Directors’ knowledge, information and belief and having made reasonable enquiries, the Target Company and its ultimate beneficial owners are third parties independent of the Company and its connected persons (as defined under the Rules Governing the Listing of Securities of The Stock Exchange of Hong Kong Limited (the ‘‘Listing Rules’’)). Save as disclosed above and as at the date of this announcement, the Directors confirm that, to the best of their knowledge, information and belief and having made reasonable enquires, Mr. Sonny Wu is not interested in any securities of the Target Company and has not received any benefits for the Investment.

REASONS FOR AND BENEFITS OF THE INVESTMENT IN THE TARGET COMPANY

The Group is principally engaged in the design, development, manufacturing, subcontracting service and sales of semiconductor products, including light-emitting diode (‘‘LED’’, a semiconductor light source that emits light when current flows through it) beads, LED lighting products, fast charging products and GaN related products in the PRC.

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. To further develop and deepen its presence in the GaN semiconductor business, the Board is of the view that the Investment will enable the Group to leverage on the extensive experience, resources and expertise of the Target Company, allowing the Group to further develop and explore the GaN semiconductor business in achieving the business goal of the Group in becoming a leading and innovative player in the GaN semiconductors sector.

It is expected that after completion of the Investment, the Group and the Target Company may have the opportunity to pool their respective advantages to each other which will create a synergy effect that can benefit both of them, in particular the Target Company will be able to provide dedicated technical support (from Ottawa, California and Taiwan) to the Group for process definition and qualification of GaN device manufacturing to achieve best-in-class yield targets and targeted qualifications. Such technical support may include, among other services, elements of the developed process that are proprietary to the Target Company only, and alignment on intellectual property strategy for resulting

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process knowhow. The Group will also be able to obtain technical support for reference design in internet data centre (IDC) power systems, electric vehicle (EV), and solar inverter applications from the Target Company on most favoured nation terms.

Additionally, the Target Company also proposes to qualify the subsidiary of the Group as a foundry partner to the Target Company and to enter into a licence agreement whereby the Group may use certain GaN technology of the Target Company for manufacturing its semiconductors components.

In light of the above, the Board is of the view that the Investment is in the interests of the Company and its shareholders as a whole. For subsequent development in the Group’s business including the GaN semiconductor business, the Group may make further investment where necessary.

LISTING RULES IMPLICATION

As all relevant applicable percentage ratios (as defined in the Listing Rules)) of the Investment are less than 5%, the Investment does not constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules.

Shareholders and potential investors are advised to exercise caution when dealing in the shares of the Company.

By order of the Board HG Semiconductor Limited Zhao Yi Wen Chairman and Executive Director

Hong Kong, 24 November 2021

As at the date of this announcement, the executive Directors of the Company 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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