Hua Hong Grace Semiconductor Limited (HK: 01347) announced on September 1 that it, along with its wholly-owned subsidiary Hua Hong Grace Shanghai, has entered into a joint venture investment agreement and a shareholders' agreement with Wuxi Entity II, Hua Xin Fund, and CDB Entity. The partners plan to inject cash contributions of $1.043 billion, $1.084 billion, $834 million, $625 million, and $584 million, respectively, into the newly formed Wuxi Joint Venture III.

The joint venture will establish a 12-inch wafer production line with a planned monthly capacity of approximately 55,000 wafers, focusing on the manufacturing and sales of integrated circuit products as well as the provision of related design and support services.

The total investment in Wuxi Joint Venture III is set at $6.95 billion, of which $4.17 billion will be funded through equity contributions from the joint venture partners, with the remaining $2.78 billion to be raised through debt financing. The capital increase is subject to customary conditions, including shareholder approval and the completion of relevant registrations and filings in China.

Upon completion of the transaction, the group will hold approximately a 51% interest in Wuxi Joint Venture III. The joint venture will continue to be a subsidiary of the company and will be consolidated into the group's financial statements.