The semiconductor packaging and testing services provider has filed for a Hong Kong listing, capitalizing on China’s strategic focus on the chip industry
Key Takeaways:
- Revenue growth has slowed sharply and the company is still in the red, which could limit its market valuation
- The company is backed by Xiaomi and Taiwanese chipmaker MediaTek
They are the brains of modern electronics and a negotiating chip in international trade. Advanced semiconductors have become crucial components in everything from automotive systems to AI, creating incentives for designers to develop increasingly powerful processors.
As China accelerates its drive toward a self-sufficient chip industry, a domestic company specializing in semiconductor packaging and testing is stepping into the spotlight with an application to list on the Hong Kong stock market.
Jiangsu Silicon Integrity Semiconductor Technology Co. Ltd., founded in 2020, has major investors, including the Taiwanese chip titan MediaTek (2454.TW), designer of electronic products Shanghai Longcheer Technology (603341.SH) and Xiaomi Changjiang — an investment fund managed by the Xiaomi Group.
Silicon Integrity was formed by three entities described in the prospectus as limited partnerships and consultancies: Xinlianxin, Nanjing Yuanjun and Ningtaixin. The largest current stakeholder with a 9.49% stake is Ningtaixin, which counts Chairman Zhang Guodong and Managing Director Pan Mingdong among its partners.
Testing the design limits
Silicon Integrity provides designs and solutions for packaging chip wafers in housings mounted on a printed circuit board. The industry has been pushing the boundaries of design to achieve increasingly smaller and more powerful chip assemblies, aided by advanced packaging techniques in the final stages of manufacturing.
The technology integrates chips and components using new methods and materials to maximize performance and energy efficiency in a compact design. Because chip specifications vary widely from product to product, high capital costs and intense competition for qualified industry experts pose a high barrier to entry into the sector.
The packaging industry mainly works according to an outsourcing model, in which prefabricated wafers are processed and tested into packaging. This approach, known as Outsourced Semiconductor Assembly and Testing (OSAT), can be broad-based or focus on chips for specific applications. According to the IPO filing, Silicon Integrity ranks seventh among Chinese general-purpose OSAT providers.
Revenues for the first half of 2025 were driven by a range of packaging formats and manufacturing technologies, from QFN (Quad Flat No-Lead) and BGA (Ball Grid Array) to LGA (Land Grid Array), wafer-level architectures and 2.5D/3D processes.
QFN packaging, an assembly method using flat metal pads, generated sales of 147 million yuan ($20.5 million), a year-on-year increase of 25.5%. The BGA method, which used a soldering process to attach the chip to the board, generated 150 million yuan, up 18.4% from the same period in 2024. The two packaging types contributed 31% and 31.8% respectively to total revenue for the six months, increasing total revenue by 22% to 475 million yuan.
The costs exceed the benefits
However, profits were offset by expenses. Expenses reached 552 million yuan in the six-month period, 77.41 million yuan more than revenue received. The net income recorded a net loss of 207 million yuan, mainly due to the cost of raw materials. However, declining depreciation and amortization rates caused EBITDA to turn positive, reaching 9.34 million yuan in the first half of 2024, before rising to 59.34 million yuan in the last half.
The prospectus cited industry research showing that the global market for chip packaging and testing rose from 495.6 billion yuan in 2020 to 649.4 billion yuan in 2024, a compound annual growth rate of 7%. As demand for consumer electronics and AI-powered computers increases, global chip packaging demand is expected to reach 933 billion yuan by 2029.
That said, packaging orders for consumer electronics are highly seasonal, with a peak in inventory builds leading up to the Lunar New Year holidays, typically boosting sales in the second and fourth quarters.
China’s push to develop a self-sufficient chip industry has improved the sector’s prospects. Leading foundries SMIC (0981.HK; 688981.SH) and Hua Hong semiconductor (1347.HK; 688347.SH) have reported profits and seen their shares rise, increasing their price-to-earnings (P/E) ratios to 104.9 times and 205 times respectively.
Silicon Integrity benefits from an impressive number of backers, with ambitions to strengthen its R&D and expand into overseas markets, according to the IPO filing. But sales growth has slowed sharply, from 89% in 2023 to 62.5% in 2024 and 22% in the first half of 2025.
The pattern of continued losses makes a high valuation unlikely unless the company can accelerate growth and double down on cost control. Without such improvements, the stock’s performance could disappoint.
Benzinga Disclaimer: This article is from an unpaid third party contributor. It does not represent Benzinga reporting and is not edited for content or accuracy.
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