(Yicai) Dec. 5 -- Eswin Material Technology, a Chinese producer of silicon wafers, aims to raise CNY4.9 billion (USD674 million) from an initial public offering on Shanghai’s Nasdaq-like Star Market to finance its capacity expansion plans.

Eswin will issue as many as 537.8 million shares, representing up to 13.4 percent of its total post-IPO equity, according to a Nov. 29 filing.

The proceeds will be fully allocated to Eswin’s second factory in Xi’an, which will produce 12-inch silicon wafers, a key chip-making component. Costing a projected CNY12.5 billion (USD1.7 billion), it will take 18 months to build.

Once completed, Eswin’s monthly production capacity for 12-inch silicon wafers is expected to reach 1.2 million, representing over 10 percent of the global total. As of Sept. 30, the firm could turn out 650,000 of the wafers a month, or 7 percent of the world’s total. It competes with the likes of Shin-Etsu Chemical, the world's top producer of silicon wafers, Sumco, and GlobalWafers.

Silicon wafers are a critical component in semiconductor manufacturing. The demand for 12-inch wafers, used in advanced chip production, is increasing as industries such as electronics, autos, and artificial intelligence expand.

Eswin is the first loss-making firm approved for a public listing in Shanghai since new measures were introduced in June. The measures aim to support Star Market listings by high-quality, innovative firms in science and technology that possess key core technologies, significant market potential, and strong sci-tech attributes.

Beijing-based Eswin had a net loss of CNY589 million (USD81 million) in the first three quarters of this year on revenue of CNY1.4 billion.

Eswin was set up in 2016 by Wang Dongsheng, who founded display panel giant BOE Technology Group. Wang stepped down as BOE chairman in 2019 to head up Eswin. He subsequently initiated a restructuring, creating Eswin Group as the parent company, and then spun off the silicon wafer business to form Eswin Material Technology.

Wang, 66, resigned as Eswin’s chairman in March last year and handed the role over to General Manager Yang Xinyuan. But he still chairs Eswin Group, which owns 25 percent of Eswin.

Editors: Dou Shicong, Futura Costaglione