Nexchip Semiconductor Corporation (02249)'s subsidiary Hefei Jingyi Integrated Circuit receives a capital increase of RMB9.1 billion

Nexchip Semiconductor Corporation (02249) announces that on November 5, 2026, the Board considered and approved the Capital Increase. The Company intends to enter into a Capital Increase Agreement with the Target Company Hefei Jingyi Integrated Circuit, Hefei Construction Investment and Hefei Qinhe, pursuant to which the Company, Hefei Construction Investment and Hefei Qinhe will collectively subscribe for RMB9.1 billion of the Target Company's newly registered capital in cash. Upon completion of the Capital Increase, the Company's shareholding in the Target Company will decrease from 100% to approximately 63.96%, but the Target Company will remain a subsidiary of the Company and will continue to be consolidated into the consolidated financial statements of the Group. The Capital Increase will help enhance the Target Company's capital strength and lay a solid funding foundation for it to advance the construction of a 12-inch wafer manufacturing production line. In view of the large investment scale and long construction period of the Phase IV project, the Company intends to introduce Hefei Construction Investment and Hefei Qinhe to contribute capital jointly, so as to broaden the Target Company's funding sources and reduce the funding pressure on the Company to independently bear the subsequent capital investment of the project. At the same time, the Capital Increase will also help the Company optimize resource allocation and retain more cash for its own core business development and to address potential market fluctuations. In addition, joint capital contributions by the investors will help share the capital investment and related investment risks in the Target Company's development process, provide support for the Target Company's long-term steady development, and ultimately enhance the Company's core competitiveness and promote long-term high-quality development. The Company's choice to have other investors participate jointly in the Capital Increase also takes into account their recognition of the Target Company's long-term growth value and their investment orientation focused on industrial synergy and strategic layout. The Company believes that joint capital contributions with investors with long-term investment intentions will help support the Target Company in advancing project construction and operations according to its business development needs, and promote alignment of interests among all parties in the Target Company's long-term development. In addition, the Target Company may subsequently introduce other investors as needed for project construction and business development, so as to continuously broaden funding sources and provide support for its long-term development. Pursuant to the Capital Increase Agreement, unless the investors have given prior written consent, the Target Company shall use all proceeds from the Capital Increase for its daily operations, including but not limited to replenishing working capital, purchasing equipment and repaying debts related to the production and operation of its main business. The Target Company will arrange the use of funds based on project progress, actual operating needs and the receipt of capital contributions from the investors, and will comply with the use restrictions stipulated in the Capital Increase Agreement. Although the Company's shareholding in the Target Company will decrease, the Target Company will remain a subsidiary of the Company and will continue to be consolidated into the consolidated financial statements of the Group. While introducing external funds and sharing capital investment and related investment risks, the Company can still share in the potential returns brought by the Target Company's future development in proportion to its shareholding. The Capital Increase will not have a material adverse effect on the Company's financial condition and business.