Kyoto Electronics, a global leaderThe SemiconductorAssembly and Testing (OSAT) outsourcing service provider has recently announced that it will sell its subsidiary shares in mainland China and plans to completely withdraw from the Chinese market. This decision was made in the context of China-US geopolitical tensions, reflecting major strategic adjustments in the global semiconductor industry under international political influence.

Since its inception in 1987, Kyoto Yuan Electric has occupied an important position in the global market for its expertise in the field of semiconductor testing, and is more focused on semiconductor testing than other major sealants such as Sunlight and Long Power Technology. According to the companys published information, the assets involved in this sale are the total shareholding of Suzhou Kyoto Yuan Technology, the company was founded in 2002, mainly engaged in crystalline needle measurement and IC finished product testing, with monthly production capacity of 100,000 units and 100 million units respectively. The facilities of Suzhou factory are huge, the dustless room area is 66,000 square meters, and is one of the main semiconductor testing bases in the region.

This withdrawal decision is a direct response to the current global semiconductor supply chain dynamics. The U.S. government’s technical restrictions and trade list measures on the Chinese semiconductor industry, in particular the prohibition of selling some key technologies and products to certain entities, have put foreign-owned enterprises operating in China facing increasing uncertainty and challenges. In addition, geopolitical tensions have also complicated the business environment in China for some high-tech companies.

By selling its assets in China, Yuan Electric will be able to focus more resources and attention on its business in Taiwan, China, and may seek more opportunities in high-profit areas such as artificial intelligence and high-performance computing. According to reports, the total sales price of Yuan Electrics sale of Suzhou Kyunglong Technology is approximately 217 billion yuan (approximately $6.661 billion), and net cash flow is expected to reach $16.6 billion (approximately $5.92 billion). The company plans to use these funds to accelerate the construction of the new chip plant, upgrade existing facilities and equipment, and invest in advanced testing technologies and equipment.

The sale of assets is expected to bring a net profit of approximately 38,2 billion yen (approximately $1,174 billion) to Yuan Electric, and part of the funds will be used to allocate cash dividends for the next two financial years, $1.5 per share.This initiative not only demonstrates the companys reorientation for its future development strategy, but also reflects considerations for shareholders interests.

Overall, the withdrawal from the Chinese market is an important development in the global semiconductor industry, especially in the context of the increasingly complex global economic and geopolitical environment. This move may also indicate that other semiconductor companies may adopt similar strategies to adapt to the changing international political and business environment.