Core Viewpoint - Huahong Semiconductor's stock dropped over 6% following the release of its interim results, reflecting investor concerns over declining net profit despite revenue growth [1] Financial Performance - The company reported a revenue of 8.018 billion yuan for the first half of the year, representing a year-on-year increase of 19.09%, driven by higher wafer sales and contributions from the FAB9 manufacturing project [1] - Net profit fell significantly to 74 million yuan, a decrease of 71.95% year-on-year, primarily due to initial capacity ramp-up costs associated with the new manufacturing project and ongoing increases in overall R&D expenditures [1] Strategic Moves - On August 17, the company announced plans to acquire equity related to the assets of Shanghai Huahong Microelectronics Co., Ltd., which competes with Huahong in the 65/55nm and 40nm segments, through a combination of share issuance and cash payment [1] - If the acquisition is successfully implemented, it is expected to enhance the company's capacity and further open up revenue growth opportunities [1]

Core Insights - The article discusses the strategic expansion of Huahong Semiconductor's 12-inch wafer production capacity, highlighting its significance in the competitive semiconductor market [1][2] - The company aims to enhance its technological capabilities and product offerings while transitioning from 8-inch to 12-inch wafer production [1] Group 1: Company Overview - Huahong Semiconductor operates two 12-inch wafer fabs in Wuxi, with a focus on automotive-grade chip manufacturing in its new facility, which began construction in June 2023 and aims for a monthly capacity of 83,000 wafers [1] - The company has seen a shift in revenue contribution from 8-inch to 12-inch wafers, with 12-inch wafer revenue increasing from $233 million in the previous year to $334 million in Q2 2025 [1] Group 2: Strategic Acquisition - The acquisition of Huahong's fifth fab is aimed at addressing industry competition and significantly increasing the overall 12-inch production capacity [2] - The fifth fab is expected to add over $500 million in annual revenue if it reaches full production, enhancing Huahong's position in the mature process market [2] - The acquisition will unify the company's production lines and create a more complete 12-inch platform, facilitating better collaboration among existing fabs [2]