Last night, Hunan Hesun Petroleum Co., Ltd. (hereinafter referred to as "the Company" or "Hesun Petroleum") issued an announcement stating that it plans to acquire no less than 34% of the equity of Shanghai Kuixin Integrated Circuit Design Co., Ltd. (hereinafter referred to as "Kuixin Technology" or "the Target Company") through a combination of cash acquisition and capital increase. Simultaneously, through a voting rights delegation, it will control a total of 51% of the voting rights of the Target Company, thus gaining control of the Target Company (hereinafter referred to as "this Transaction").
Upon completion of this Transaction, the Company will appoint directors to occupy two-thirds of the board seats in the Target Company, and the Chief Financial Officer of the Target Company will be a person recommended by the Company. The Company will have decision-making power over the Target Company's operations, personnel, and finances. The Target Company will be included in the Company's consolidated financial statements, becoming a controlling subsidiary. The valuation/audit work for this transaction has not yet been completed, and the transaction price has not yet been determined.
Regarding this transaction, both parties confirmed that the value of 100% equity in the target company will not exceed RMB 1.588 billion (post-capital increase valuation), and the final transaction amount is expected to be no more than RMB 540 million. The final transaction price will be determined based on the valuation results issued by an asset appraisal institution appointed by the company that complies with the provisions of the *Securities Law of the People's Republic of China* (hereinafter referred to as the "Securities Law"). Both parties will sign a formal equity acquisition agreement to stipulate this.
Public information shows that Hesun Petroleum's main business is gas station retail chain, refined oil storage, logistics distribution, and wholesale. The company's main products are diesel and gasoline.
Regarding the initial intention of this cross-industry move, the announcement stated that after careful research and discussion, the company's management believes that the semiconductor IP-related industry in which the target company operates has good development prospects and significant growth potential. The company intends to strategically position itself in this field to find new performance growth points and promote its future sustainable development.
As for Kuixin Technology, the announcement shows that the company was established in 2021 and focuses on creating high-speed interface IP and Chiplet solutions. The target company is one of the few domestic enterprises with a complete high-speed interface IP product matrix, filling a domestic gap and gradually breaking the foreign monopoly. Its protocol iteration and process technology are one generation ahead of some competitors. Currently, it covers protocols such as UCIe, HBM, ONFI, LPDDR, PCIe, eDP, and USB, with PPA indicators comparable to leading overseas companies. Its latest product, the UCIe Chiplet interconnect IP, has been used in domestically produced high-computing-power chips, supporting the expansion of computing clusters with tens of thousands of cards of power.
The target company has built a strategic cooperation network covering international wafer foundries such as TSMC and Samsung, and has successfully developed interface IP covering processes from 5nm to 55nm, widely used in data centers, artificial intelligence, automotive electronics, and consumer electronics.
The target company is one of the few domestic enterprises capable of providing complete Chiplet solutions. It has launched an interconnect solution based on IO Die, achieving high-speed interconnection between different chips through the UCIe protocol, improving computing performance and reducing latency. This solution has been implemented for AI and data center customers and boasts a broad ecosystem of partners, including collaborations with wafer foundries, Die design delivery, and interposer design.
Multiple IP products from the target company have been tape-out and delivered to customers. These products feature high performance, low power consumption, high stability, and good compatibility, with high IP completeness and short verification cycles. The target company currently serves over 60 customers, primarily covering AI, data centers, and other industries. Its benchmark customers include international storage industry giants and AI unicorn companies.
The target company has applied for over 100 intellectual property rights, including 49 authorized invention patents, 10 overseas patents, and 46 invention patents under substantive examination; it has also been granted 10 integrated circuit layouts and 1 software copyright. The target company has obtained the following qualifications: National Specialized, Refined, and Innovative Small Giant Enterprise Qualification, National High-tech Enterprise Qualification, National Science and Technology-based SME Qualification, Shanghai Specialized, Refined, and Innovative SME Qualification, Shanghai Enterprise Technology Center, Shanghai Innovative SME Qualification, Shanghai Integrated Circuit Design Enterprise Certification, ISO9001 Quality Management System Certification, and Intellectual Property Management System Certification.
The Design Service and Chiplet businesses offer flexible business cooperation models to meet diverse customer needs. The target company's business and business model are categorized into the following three types based on the products and services provided:
(1) Providing semiconductor IP to chip design companies or wafer foundries, charging customers a one-time licensing fee and royalties based on the customer's mass production, as stipulated in the contract.
(2) Providing ASIC/Design Service, including chip tape-out and mass production, chip design and verification, and assistance with packaging design, charging commissioned design revenue (NRE) and ongoing revenue from subsequent mass production.
(3) Currently, the target company's business model for Chiplet business is divided into two types: one is to collect licensing fees and royalties, that is, to license the designed Chiplet solution to customers in the form of IP for their own production; the other is to deliver to customers in the form of IO Die products, providing customers with complete small chip products, and the product sales method is to sell by the chip.
Source: Content compiled from Semiconductor Industry Observer
