China's LCD Pioneer Doubles Down on Chips with Eswin IPO

Chinese semiconductor supplier Eswin Technology Group is preparing to list its silicon wafer unit on the Shanghai Stock Exchange, marking a significant expansion for Chairman Wang Dongsheng, known as the father of China's liquid crystal display industry, as reported by Nikkei Asia.

The Shanghai Stock Exchange's STAR market, focused on technology companies, announced in late November that it had accepted the initial public offering (IPO) application from Eswin Material Technology. The wafer-making unit aims to raise 4.9 billion yuan ($671 million) from the offering, according to filings. These funds will be used to construct Eswin Material's second plant in Xi'an, China, boosting the company's monthly output capacity to 1.2 million 12-inch wafers from 650,000 units.

Eswin Material is currently the largest producer of 12-inch wafers in mainland China. The quality of its products is comparable to global competitors, and the company supplies Micron Technology, a US chipmaker with facilities in China. However, Eswin Material currently holds only a 4% global market share by shipment volume, while five companies outside mainland China control 85% of the market.

Through the IPO, Eswin Material aims to expand its capacity and cover approximately 40% of China's domestic demand for wafers. The company's revenue has grown significantly, from 200 million yuan in 2021 to 1.4 billion yuan in 2023, with further sales growth projected for this year.

Eswin Material's IPO has drawn attention due to its connection to Wang Dongsheng. Wang's entrepreneurial journey began in 1993 when he took over a state-owned vacuum-tube plant in Beijing, later renaming the company BOE Technology Group. BOE went on to become a leading supplier of LCD panels, surpassing competitors from Japan and South Korea.

Many members of Eswin Material's management are former BOE employees, including Chairman Yang Xinyuan and President Liu Huanping. Wang himself chairs Eswin Material's strategic investment committee.

Eswin Technology Group's emergence is closely linked to US-China tensions. In 2015, Beijing launched the "Made in China 2025" initiative, aiming to establish an independent chip supply chain resistant to American sanctions. BOE and other partners helped found the predecessor to Eswin Technology Group, and Wang left BOE in 2019 to become the group's chairman.

Eswin Material has since taken the lead in mass-producing wafers using Chinese technology. Eswin Computing Technology, the chip designer within the Eswin group, is also experiencing significant growth. Eswin Computing has become a major player in semiconductors for LCD panels and is expanding into automotive applications. Echint Technology, the group company handling sealing and inspections, operates what is cited as the most advanced chip facilities on the Chinese mainland.

To further drive growth, the Eswin group has been actively recruiting talent from outside China. Two of the five core engineers at Eswin Material are South Korean nationals.