ZTE Corporation acquired 24% of the equity in ZTE Microelectronics – the shares were previously held by the National Integrated Circuit Industry Investment Fund through a wholly-owned subsidiary.
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ZTE Microelectronics is a chip subsidiary of ZTE (000063:SZ, 00763:HK), focusing on three terminals of fixed network, mobile phone and IPTV, and its self-developed processor LTE-A chip. It has completed CNY 2.4 billion in equity transfer financing, invested by ZTE. The post-investment valuation is CNY 10 billion, and ZTE will hold 92.4% of shares.
The company's financial statements show that the revenues in 2018 and 2019 were CNY 5.18 billion and CNY 5 billion respectively, and the net profits attributable to shareholders of the parent company reached CNY 157 million and CNY 196 million.
At the shareholders meeting last year, ZTE CEO Xu Ziyang stated that ZTE Microelectronics is the core tool for the development of ZTE's chip business. It has realized all the independent design of dedicated chips in communications and all chips have been manufactured by partners. The 10nm and 7nm processes are now available and ZTE is advancing to the 5nm process.