On June 17, 2020, Shanghai Silicon Industry Group Co., Ltd. announced that the company has deliberated and passed the "proposal on the use of part of the raised funds and self owned funds to increase the capital of the wholly-owned subsidiary Shanghai Xinsheng to implement the project of raising funds", and agreed to use part of the raised funds and self owned funds to increase the capital of the wholly-owned subsidiary Shanghai Xinsheng Semiconductor Technology Co., Ltd.

The total amount of capital increase this time is 1.600 billion yuan, including 1.599 billion yuan of raised funds (including 5 million yuan of capital stock converted from loans of raised funds) and 927100 yuan of self owned funds. After the completion of the capital increase, the registered capital of Shanghai Xinsheng will be changed from 780 million yuan to 238 million yuan, and the company still holds 100% equity of Shanghai Xinsheng.

According to the reply on Approving the registration of Shanghai Silicon Industry Group Co., Ltd. for the initial public offering issued by China Securities Regulatory Commission, the company issued 620068200 A shares for the first time in April 2020, with the issuing price of RMB 3.89 per share, and the total amount of raised funds is RMB 2412065298.00, deducting the issuance expenses of RMB 127675, After 510.47 yuan, the actual net amount of funds raised is RMB 2284389787.53 yuan.

According to the company's "initial public offering and listing on the science and Technology Innovation Board" of the company, the raised funds are mainly used for "300 mm silicon wafer technology research and development and industrialization phase II project" (hereinafter referred to as "300 mm silicon chip phase II") and "supplementary liquidity".

Shanghai silicon industry group said in the announcement that the implementation subject of "300 mm silicon wafer phase II" in the company's IPO project was Shanghai Xinsheng, a wholly-owned subsidiary of the company. In order to ensure the smooth implementation of the project, the company plans to increase its capital by RMB 160000000, including RMB 1599072851.27 (including RMB 500000000 from capital stock converted from loan of raised fund) and RMB 927148.73 from its own capital. After the completion of the capital increase, the registered capital of Shanghai Xinsheng will be changed from 780 million yuan to 238 million yuan, and the company still holds 100% equity of Shanghai Xinsheng.

This time, the company used part of the raised funds and self owned funds to increase capital to the wholly-owned subsidiary Shanghai Xinsheng, which is mainly based on the construction needs of the raised investment projects. The use mode and purpose of the raised funds are in line with the development direction of the company's main business, help to meet the needs of project funds, ensure the smooth implementation of the projects invested by raised funds, and conform to the use arrangement of the raised funds and the development strategy and planning of the company. There is no disguised change in the investment direction of the raised funds and damage the interests of shareholders.