Innoscience, a semiconductor company focused on gallium nitride (GaN) technology, has signed an investment agreement for an initial public offering (IPO) on the main board of the Hong Kong Stock Exchange. According to the latest information, Innoscience is expected to be officially launched on December 30, 2024. This marks an important step in Innoscience's global expansion to further advance the use of GaN semiconductor technology in power electronics, consumer electronics and electric vehicles.
Investor support: STMicroelectronics becomes a cornerstone investor
Although Innoscience and its partners have not yet issued an official statement, according to the IPO documents, Innoscience has reached agreements with a number of cornerstone investors, including STMicroelectronics, Jiangsu Province State-owned Enterprise Mixed Ownership Reform Fund, Jiangsu Suzhou High-end Equipment Industry Special Fund of Funds and Suzhou Oriental Chuanglian Investment Management Co., Ltd. STMicroelectronics, as a cornerstone investor, has committed to subscribing for a large number of Innoscience's H shares.
The signing of this agreement not only establishes a strategic partnership, but also lays the foundation for Innoscience's global large-scale distribution. China International Capital Corporation Hong Kong Securities Limited and CMB International Capital Limited acted as the general coordinator and capital market intermediary for the IPO to ensure that the listing process complied with the regulatory requirements of the China Securities Regulatory Commission, the Hong Kong Stock Exchange and other regulatory authorities, and protected transparency and the interests of investors.
IPO details: pricing range and issuance plan
According to the prospectus, Innoscience plans to conduct an H-share IPO subscription from December 18 to December 23, 2024. The IPO is priced between HK$30.86 and HK$33.66 per share, and it plans to issue approximately 453.64 million H shares globally, of which approximately 4 million shares will be issued in Hong Kong and 45 million shares will be issued internationally, with a 15% over-allotment option. The listing is expected to bring significant funding to the company to further drive its R&D and production expansion in the GaN semiconductor space.
Figure:STmicroelectronics Partner with Innosciences Boosting GaN Semiconductor Market
The potential of GaN technology: driving explosive industry growth
GaN technology is becoming an important breakthrough in the field of power electronics due to its superior performance to traditional semiconductor materials. GaN not only has a larger bandgap, but also has the advantages of low on-resistance, high electron mobility, and low switching frequency. These advantages enable GaN to be widely used in multiple fields, especially in high-power and high-efficiency scenarios.
The high frequency, low loss, and cost-effective characteristics of GaN power semiconductors have made them rapidly emerge in applications such as fast charging of smart devices, automotive-grade charging, and data centers, and have promoted the explosive development of the GaN industry. According to Frost & Sullivan's forecast, the GaN market will grow at a compound annual growth rate (CAGR) of 98.5% between 2024 and 2028, and the GaN power semiconductor market will exceed $6.8 billion by 2028, accounting for 10.1% of the global power semiconductor industry.
Among them, electric vehicles and consumer electronics are two important forces driving the widespread application of GaN technology. The use of GaN in fast chargers and adapters is expected to increase significantly by 2028, with the consumer electronics market reaching $2.9 billion. The increasing penetration of the electric vehicle market and the increase in the value of each vehicle will drive the GaN market to reach $3.4 billion by 2028, with a compound annual growth rate of 216.4%.
Global Leadership: Innoscience's strategic layout
Although GaN semiconductor technology has great application potential, there are still challenges such as technical standards, upfront investment, and industry barriers to entering this field. The world's top five power semiconductor companies typically adopt the IDM (Integrated Equipment Manufacturer) model, which is responsible for the entire process from design to manufacturing and testing. However, this model requires a high technical threshold and initial investment.
Innoscience has chosen the IDM model since its inception and is committed to building a GaN production base integrating design, R&D, manufacturing and sales. The company currently has two 8-inch silicon-based GaN production sites in Suzhou and Zhuhai, China, with a monthly production capacity of 10,000 wafers at the end of 2023 to 12,500 wafers by the end of June 2024, cementing its position as the world's largest producer of GaN devices.
Future outlook: Funding for global expansion
Through this IPO, Innoscience will receive the required capital to increase production capacity, accelerate the development of GaN semiconductors, and strengthen its presence in the global market. This strategic alliance will not only help it gain a strong position in the fast-growing GaN market, but will also drive its competition with companies such as EPC and Infineon in the future.
Looking ahead, the application of GaN technology in electric vehicles, consumer electronics, and other high-power, high-efficiency fields will be further expanded. With Innoscience's continued investment in R&D and production capacity, the company is expected to become a significant player in the global GaN semiconductor industry.
