(Yicai Global) July 24 -- Xiamen Hongxin Electronics Technology Group’s stock rose after the Chinese electronics supplier said it has inked a deal to build a factory for artificial intelligence computing power servers in northwest China for CNY1 billion (USD139 million).

After earlier surging by as much as 8 percent, Hongxin Electronics [SHE: 300657] finished up 2.7 percent at CNY19.47 (USD2.71) a share today. The broader Shenzhen market fell 0.6 percent.

Hongxin Electronics signed the agreement with the economic development management committee of Tianshui in Gansu province to build a plant with an annual capacity of 100,000 servers, aiming to localize production of such products, the Xiamen-based firm said yesterday.

The plant will be built in two stages, with Hongxin Electronics spending CNY200 million (USD27.8 million) in the first to produce 20,000 high-performance servers a year worth over CNY5 billion annually from 2025, the firm noted. Details about the second stage will be decided later, it said.

Under the deal, the committee should finish construction and decoration of the workshops in the first stage, Hongxin Electronics said. It will also help the company secure at least 5,000 orders by the end of October and another 15,000 by the end of next year, it added.

The plant aims to integrate computing power server core technologies, including high-efficiency AI computing power chips from strategic partners, to realize smart production of domestically made servers, Hongxin Electronics noted.

Editor: Martin Kadiev