Hua Hong Grace Semiconductor Limited will seek shareholder approval on 23 September 2026 to realign unused proceeds from its 2023 STAR-Market RMB share issue and to inject fresh capital into a new 12-inch wafer fabrication project in Wuxi (Wuxi JV III).

IPO PROCEEDS REALLOCATION • The August 2023 RMB share offering generated gross proceeds of RMB 21.20 billion and net proceeds of RMB 20.92 billion. • Of this, RMB 3.03 billion in surplus funds and RMB 2.53 billion left over from two completed projects (8-inch Factory Optimisation and Specialty R&D) remain unspent as of 14 August 2026. • Hua Hong Grace proposes to redeploy the combined RMB 5.56 billion (including accrued interest) to part-fund its equity commitment in Wuxi JV III. • An additional RMB 0.15 billion that remains after finishing the first Wuxi manufacturing project will be permanently shifted to working-capital reserves.

WUXI JV III OVERVIEW • Planned investment: US$6.95 billion. • Capacity target: 55,000 12-inch (300 mm) wafers per month, focusing on specialty logic, RF, image sensor and non-volatile memory processes. • Project completion and initial production are scheduled for December 2027. • Construction leverages existing infrastructure at Hua Hong Grace’s Wuxi campus and will add new cleanrooms, utilities and advanced process equipment.

JOINT-VENTURE STRUCTURE & FUNDING • Conversion of Wuxi JV III into a joint venture and registered-capital increase from RMB 6.68 million to US$4.17 billion. • Shareholding post-capitalisation: Hua Hong Grace 25%, wholly-owned subsidiary HHGrace Shanghai 26%, Wuxi Municipal Entity II 20%, Hua Xin Fund 15%, and CDB Entity 14%. • Equity commitments: – Hua Hong Grace: US$1.04 billion – HHGrace Shanghai: US$1.08 billion – Wuxi Municipal Entity II: US$0.83 billion – Hua Xin Fund: US$0.63 billion – CDB Entity: US$0.58 billion (already fully paid) • Funding schedule: 80% of each investor’s commitment (excluding CDB Entity) by 31 October 2026; remaining 20% by 31 March 2027. • Balance of US$2.78 billion to be financed through debt.

GOVERNANCE & OTHER TERMS • The JV board will have seven directors: four nominated by Hua Hong Grace/HHGrace Shanghai, and one each by Wuxi Municipal Entity II, Hua Xin Fund and Wuxi JV III employees. • CDB Entity holds a redemption right allowing it to require HHGrace Shanghai to repurchase its stake under agreed terms. • Hua Hong Grace will retain 51% effective control, ensuring continued full consolidation of Wuxi JV III in group financial statements.

NEXT STEPS The proposed capital reallocation and JV investment require ordinary resolutions at the 23 September hybrid EGM. If approved, Hua Hong Grace expects the first tranche of equity (80% of commitments) by 31 October 2026, enabling accelerated build-out of the new fab.