Ferrotec : Notice of the Fifth Issuance of New Shares through Third-Party Allotment by Subsidiary that Manufactures Insulated Heat Dissipating Substrates for Power Semiconductors picture_as

News Release: Ferrotec Holdings Corporation (6890 TSE Standard)

November 15, 2022

Notice of the Fifth Issuance of New Shares through Third-Party Allotment by Subsidiary that

Manufactures Insulated Heat Dissipating Substrates for Power Semiconductors

Ferrotec Holdings Corporation (Representative Director: He Xian Han; hereinafter "the Company") announces that, at the meeting of Board of Directors held today, we have resolved to conduct the fifth issuance of new shares of Ferrotec (Jiangsu) Semiconductor Technology Co., Ltd. (hereinafter "FLH"), which is a subsidiary that manufactures insulated heat dissipating substrates for power semiconductors, through third-party allotment. Details are as follows.

Regarding the abbreviation of the name of the subsidiary, it had been "FTSJ" until the previous disclosure through the "Notice of Capital Investment (Construction of a New Factory) by Subsidiary that Manufactures Insulated Heat Dissipating Substrates for Power Semiconductors" on July 20, 2022, but it was changed to FLH, which will be used from this disclosure.

1. Reason and background for the third-party allotment

Since our power semiconductor business has been growing remarkably, we have enhanced our production capacity. In addition to the current production sites in Shanghai and Dongtai, we are expected to secure land for a new factory in Neijiang, Sichuan, so we conducted the fourth issuance of new shares through third-party allotment in May 2022.

We are proceeding with the construction of a new factory in Neijiang and striving to increase production output by enhancing the capacities of the existing factories. It is becoming more important to secure appropriate routes for supplying materials in order to realize the increase in production output.

In our research institute established in May 2021, new products are being developed, and the investment in commercialization will become necessary in 2023 or later.

To procure funds for them, we decided to conduct the fifth issuance of new shares through third-party allotment, while considering the maintenance of our sound financial standing, etc. Through this capital increase, the ownership ratio of the Company will decrease, but it is assumed that FLH will remain an important consolidated subsidiary of the Company after listing.

2. Purpose of use of the proceeds to be raised

The procured funds amounting to 700 million yuan (about 14.1 billion yen) will be allocated to mainly the investment for increasing production output, the securing of materials, the investment in commercialization, etc.

3. Outline of FLH (former FTSJ) as of September 30, 2022

(1)	Name		Ferrotec (Jiangsu) Semiconductor Technology Co., Ltd. (FLH)
(2)	Address		18 Hongda Road, Chengdong New District, Dongtai City, Jiangsu Province, China
(3)	Title and name of		He Xian Han, Representative Director
	Representative
(4)	Contents of business		Manufacture and sale of power semiconductor substrates
(5)	Capital		379,158,000 yuan (approx. 7.6 billion yen)
			*1 Chinese yuan = 20.15 yen
(6)	Date of establishment		March 16, 2018
			Shareholder	Current		After third-
	Major shareholders and				shareholding		party
(7)				ratio		allotment
shareholding ratio
		Shanghai Shenhe Investment Co., Ltd.	60.6%		55.1%
			(FTS)
			Capital relationship	FLH is a subsidiary 60.6% of whose voting rights are held
(8)	Relationship between FLH			by FTS, a consolidated subsidiary of the Company.
and the company		Personnel relationship	The representative	director and	president	of	the
				Company concurrently serves as		director	of	the

News Release: Ferrotec Holdings Corporation	(6890 TSE Standard)
							subsidiary.
						Business relationship	Nothing is applicable.
4. Overview of the third-party allotment
	(1)		Issue price per share		18.46 yuan/yuan of capital (approx. 429 yen)
						*1 Chinese yuan = 20.15 yen
	(2)		Total contribution amount		700,000,000 yuan (approx. 14.1 billion yen)
	(3)		Settlement date		In December 2022 (schedule under consideration)
	(4)		Increased capital		37,916,000 yuan (approx. 760 million yen)
	(5)		Registered capital after		417,074,000 yuan (approx. 8.4 billion yen)
			third-party allotment
						No.1 Jiaxing Chengfu Equity Investment Partnership(Limited	1.95%
						Partnership)
						No.2 Advanced Manufacturing Industry Investment Fund Second	1.95%
						Phase (Limited Partnership)
						No.3 Zhuji Orient Security Lede Investment Partnership (Limited	1.04%
						Partnership)
						No.4 Gongqingcheng Qicheng Venture Capital Partnership (Limited	1.04%
						Partnership)
						No.5 Yangzhou Economic and Technological Development Zone Linxin	0.52%
						Industry Investment Fund Partnership (Limited Partnership)
			Ownership ratio of each		No.6 Jiaxing Junxi Equity Investment Partnership (Limited Partnership)	0.65%
	(6)			No.7J iangsu Lettall Electronic Co., Ltd.		0.26%
		allocatee
				No.8 Jiaxing Jinyi Equity Investment Partnership (Limited Partnership)	0.26%
						No.9 Qingdao Chaorun Equity Investment Partnership (Limited	0.26%
						Partnership)
						No.10 Qingdao Guoda Hunpu Venture Capital Fund Partnership	0.26%
						(Limited Partnership)
						No.11 Ningbo Yuteng Venture Capital Partnership (Limited Partnership)	0.26%
						No.12 Jiaxing Jingxi Venture Capital Partnership (Limited Partnership)	0.26%
						No.13 Yangzhou Xinlian No.1 Equity Investment Partnership (Limited	0.26%
						Partnership)
						No.14 Dongtai FuLeHua Ji Enterprise Management Consulting	0.13%
						Partnership (Limited Partnership)

*The issue price was determined based on an evaluation of the stock's fair value by a third-party organization that is independent from the Company and allottees, and then the shares were allotted.

5. Overview of the allottees

		No.1	No.2
		Jiaxing Chengfu Equity Investment	Advanced Manufacturing Industry
(1)	Company name	Partnership	Investment Fund Second Phase
		(Limited Partnership)	(Limited Partnership)
(2)	Capital	150 million yuan	49.8 billion yuan
(3)	Date of establishment	November 9, 2022	June 18, 2019
			37 companies including the followings:
		Jiaxing Yiyuan Xinheng Equity
		Investment Partnership (Limited	Ministry of Finance of the People's
	Major shareholders	Partnership): 46.67%	Republic of China
(4)	and shareholding	Jiaxing Shenneng Lianyi Equity	State Development & Investment
	ratio	Investment Partnership (Limited	Corporation
		Partnership): 25.67%	 China Merchants Capital Investment
		Laiyang Huifeng Investment Co., Ltd.	Co., Ltd.

News Release: Ferrotec Holdings Corporation	(6890 TSE Standard)
			(Limited Partnership): 20.00%		Hefei Venture Capital Guidance Fund
			Jiaxing Shenyicanglong Equity	Co., Ltd.
			Investment Partnership (Limited
			Partnership): 6.67%
			Ningbo Shenyi Investment Management
			Co., Ltd.: 1.00%
			GP:	Ningbo	Shenyi	Investment	GP: SDIC Investment Management Co.,
			Ltd.
	(5)	Representative	Management Co., Ltd.
		(Delegated representative: Gao Guo
			(Delegated representative: Song Yi Qin)
			Hua)
	(6)	Contents of business	Investment in shares and investment	Investment in shares, invest
			consulting		management and consulting
		Relationship between	There are no capital, personnel, or	There are no capital, personnel, or
			business relationships.	business relationships.
	(7)	FLH and the
	The company does not belong to related	The company does not belong to related
		companies
				parties.		parties.
	(8)	Contribution amount		150 million yuan (3 billion yen)	150 million yuan (3 billion yen)
*1 Chinese yuan = 20.15 yen
					No.3		No.4
	(1)	Company name	Zhuji Orient Security Lede Investment	Gongqingcheng Qicheng Venture Capital
		Partnership (Limited Partnership)	Partnership (Limited Partnership)
	(2)	Capital		5 million yuan		10.01 million yuan
	(3)	Date of establishment		November 27, 2020	November 3, 2022
		Major shareholders	Zhuji East Securities Ruiqiao Investment	Lin Guo Chun: 99.90%
	(4)	and shareholding	Partnership (Limited Partnership): 90%	 Guangzhou Fengshuo Venture Capital
	Shanghai Orient Securities Capital
		ratio	Fund Management Co. LTD: 0.10%
		Investment Co., Ltd.: 10%
			GP: Shanghai Orient Securities Capital	GP: Guangzhou Fengshuo Venture
	(5)	Representative	Investment Co., Ltd.		Capital Fund Management Co. LTD
			(Representative: Jin Wen Zhong)	(Representative: Lin Guo Chun)
			Investments in shares and start-ups	Private equity investment, investment
			(limited to the investment in unlisted
			management, asset management and
	(6)	Contents of business	enterprises), social and economic
	investment in start-ups (limited to the
			consulting services, and business
			investment in unlisted enterprises)
				administration consulting
		Relationship between	There are no capital, personnel, or	There are no capital, personnel, or
			business relationships.	business relationships.
	(7)	FLH and the
	The company does not belong to related	The company does not belong to related
		companies
				parties.		parties.
	(8)	Contribution amount		80 million yuan (1.6 billion yen)	80 million yuan (1.6 billion yen)
*1 Chinese yuan = 20.15 yen
					No.5		No.6
			Yangzhou Economic and Technological	Jiaxing Junxi Equity Investment
			Development Zone Linxin Industry
	(1)	Company name	Partnership
	Investment Fund Partnership (Limited
			(Limited Partnership)
				Partnership)
	(2)	Capital		502 million yuan		10 million yuan
	(3)	Date of establishment		July 12, 2022		August 1, 2022
		Major shareholders	 Jiangsu Nantong Haisheng Xianting	Zhang Hao: 99%
	(4)	and shareholding
	Investment Fund Partnership (Limited	 Shanghai Junluo Enterprise
		ratio

News Release: Ferrotec Holdings Corporation	(6890 TSE Standard)
			Partnership)	Management Partnership (Limited
				Shanghai C&D Zaoqiang Private Fund	Partnership): 1%
				Partnership (Limited Partnership)
				Industrial master fund of Yangzhou
			Economic&Technological Development
			Zone (Limited Partnership)
				Anhui Yingjia Investment Management
			Co, Ltd, etc.
			GP: Shanghai Linxin Investment	GP: Shanghai Junluo Enterprise
			Management Partnership (Limited
	(5)	Representative	Management Co., Ltd.
	Partnership)
			(Representative: Li Ya Jun)
			(Representative: Wen Wei)
				Investment in shares through private
				equity funds, investment management,
	(6)	Contents of business		asset management and investment in	Investment in shares and industry
				start-ups (limited to the investment in
				unlisted enterprises)
		Relationship between		There are no capital, personnel, or	There are no capital, personnel, or
			business relationships.	business relationships.
	(7)	FLH and the
	The company does not belong to related	The company does not belong to related
		companies
			parties.	parties.
	(8)	Contribution amount		40 million yuan (800 million yen)	50 million yuan (1 billion yen)
*1 Chinese yuan = 20.15 yen
				No.7	No.8
	(1)	Company name		Jiangsu Lettall Electronic Co., Ltd.	Jiaxing Jinyi Equity Investment
		Partnership (Limited Partnership)
	(2)	Capital		182 million yuan	50 million yuan
	(3)	Date of establishment		November 25, 1980	September 1, 2022
			10 shareholders including the followings:
		Major shareholders	Shao Shu Wei: 37.24%	Wang Zhi Xiang: 99.8%
		Shao Qiu Ping: 8.57%
	(4)	and shareholding	Shanghai Jinguan Investment
	Beijing Tedsun Investments Co., Ltd.-Tedsun
		ratio	Investment Tailai No.1 Private Fund: 6.22%	Management Co., Ltd.: 0.2%
			Shao Pei Sheng: 3.53%
	(5)	Representative	Shao Shu Wei	Lu Lu
			R&D, production and sale of liquid crystal
				display panels/parts, metallic structure
				parts, electronic parts, flat display
			devices, dedicated equipment, electronic
				products, molds, semiconductors,
			metallic products, water-heating devices,
	(6)	Contents of business		equipment and parts for environmental	Investment in shares
		protection, measuring instruments, and
				general-purpose equipment,
				export/import of products and
				technologies associated with distributed
				photovoltaic power generation and
				environmental quality, and the agency
				thereof
	(7)	Relationship between		There are no capital, personnel, or	There are no capital, personnel, or

News Release: Ferrotec Holdings Corporation	(6890 TSE Standard)
		FLH and the	business relationships.	business relationships.
		companies	The company does not belong to related	The company does not belong to related
			parties.	parties.
	(8)	Contribution amount	20 million yuan (400 million yen)	20 million yuan (400 million yen)
*1 Chinese yuan = 20.15 yen
			No.9	No.10
	(1)	Company name	Qingdao Chaorun Equity Investment	Qingdao Guoda Hunpu Venture Capital
	Partnership (Limited Partnership)	Fund Partnership (Limited Partnership)
	(2)	Capital	5 million yuan	10 million yuan
	(3)	Date of establishment	May 13, 2022	November 3, 2022
		Major shareholders	Yan Xie Fang: 98%	Zhang Jian: 99.90%
		 Qingdao Jinyu Hunpu Private Fund
	(4)	and shareholding	Shanghai Ruixia Private Equity Fund
		ratio	Management Co., Ltd.: 2%	Management Partnership (Limited
		Partnership): 0.10%
			Shanghai Ruixia Private Equity Fund	GP: Qingdao Jinyu Hunpu Private Fund
	(5)	Representative	Management Co., Ltd.	Management Partnership (Limited
			(Representative: You Qin)	Partnership)
			Investment in start-ups (limited to the	Investment in shares through private
	(6)	Contents of business	investment in unlisted enterprises) and	equity funds, investment management
			financial consulting	and asset management
		Relationship between	There are no capital, personnel, or	There are no capital, personnel, or
		business relationships.	business relationships.
	(7)	FLH and the
	The company does not belong to related	The company does not belong to related
		companies
		parties.	parties.
	(8)	Contribution amount	20 million yuan (400 million yen)	20 million yuan (400 million yen)
*1 Chinese yuan = 20.15 yen
			No.11	No.12
	(1)	Company name	Ningbo Yuteng Venture Capital	Jiaxing Jingxi Venture Capital
	Partnership (Limited Partnership)	Partnership (Limited Partnership)
	(2)	Capital	10 million yuan	30 million yuan
	(3)	Date of establishment	March 8, 2022	October 8, 2022
		Major shareholders	Liu Kan Xing Ru: 99%	Zhou Jia Chen: 96.67%
	(4)	and shareholding	 Yuhao (Jiaxing) Equity Investment Co.,	Shanghai Deguan Asset Management
		ratio	Ltd.: 1%	Co., Ltd.: 3.33%
	(5)	Representative	GP: Yuhao (Jiaxing) Equity Investment	Qian Xue Jun
	Co., Ltd. (Representative: Cai Si Zhe)
	(6)	Contents of business	Investment in start-ups (limited to the	Investment in start-ups (limited to the
	investment in unlisted enterprises)	investment in unlisted enterprises)
		Relationship between	There are no capital, personnel, or	There are no capital, personnel, or
		business relationships.	business relationships.
	(7)	FLH and the
	The company does not belong to related	The company does not belong to related
		companies
		parties.	parties.
	(8)	Contribution amount	20 million yuan (400 million yen)	20 million yuan (400 million yen)
*1 Chinese yuan = 20.15 yen
			No.13	No.14
			Yangzhou Xinlian No.1 Equity	Dongtai FuLeHua Ji Enterprise
	(1)	Company name	Investment Partnership	Management Consulting Partnership
			(Limited Partnership)	(Limited Partnership)
	(2)	Capital	10 million yuan	5.14 million yuan
	(3)	Date of establishment	June 14, 2022	October 12, 2020