Behind the 268 million investment: Jinko Electronics invests in third-generation semiconductors to deepen

On February 24, Guangdong Jinko Electronics Co., Ltd. (02551.HK, hereinafter referred to as "Jinko Electronics") announced that it plans to invest 268 million yuan to participate in the establishment of the Guangzhou Tianze Jingxin Venture Capital Fund with a total scale of 668 million yuan as a limited partner (LP). The fund's investment scope includes the third-generation semiconductor company Guangdong Xinjuneng Semiconductor Co., Ltd. (hereinafter referred to as: Xinxineng).

Yesterday (4/8) evening, Jinko Electronics further disclosed that it would indirectly invest in Core Energy through equity transfer and capital increase. After the transaction is completed, Jinko Electronics will hold approximately 40.12% of Guangzhou Tianze's equity as a limited partner, and will have approximately 3.8435% of the actual economic interest in Core Energy.

1. Strategic turning point under the dual-track intersection of "LED+" and semiconductors

Against the background of accelerated restructuring of the global technology industry and continuous adjustment of supply chains in 2026, the semiconductor and optoelectronic display industries are on two clearly differentiated industry cycle curves. At this time, Jinko Electronics’ cross-border capital layout hides two converging industrial trends.

This investment means that Jinko Electronics is extending its original "LED+" strategy further upstream. On the one hand, the company's core advantages are mainly reflected in the application levels of automotive intelligent vision systems, Micro/Mini LED new displays and high-end lighting. By participating in the third-generation semiconductor industry chain, the company has begun to come into contact with the more core power device links in system operation, such as SiC and GaN power modules, resulting in a closer technical collaboration between optical systems and power drive technology.

On the other hand, the third generation semiconductors (wide bandgap semiconductors) represented by silicon carbide (SiC) and gallium nitride (GaN) are entering a stage of rapid growth. Compared with traditional silicon-based (Si) semiconductors, third-generation semiconductors have obvious advantages in material properties, such as higher breakdown electric field, higher electron mobility, and better thermal conductivity. These characteristics enable it to perform better in high-power, high-frequency and high-temperature environments, making it an important material to break through the bottleneck of traditional power electronics technology.

Because of this, SiC and GaN not only bring technological innovation at the material science level, but also become important core devices for new energy vehicles (NEV), artificial intelligence (AI) data centers and new power infrastructure at the application level. With the rapid growth of AI computing power demand, the demand for efficient power supply systems in data centers continues to increase.

According to TrendForce, a global high-tech industry research organization, in order to cope with the growing computing power and power consumption requirements in the era of large models, AI server shipments are expected to maintain a growth of more than 20% in 2026. At the same time, the market penetration rate of third-generation semiconductor SiC/GaN in data center power supply systems is expected to increase to approximately 17% in 2026, and is expected to further exceed 30% in 2030, showing very clear long-term growth space.

Against this industrial background, Jinko Electronics has not passively waited for changes in the industry cycle. Instead, it has always adhered to the development idea with "LED+" technology as the core for many years. Through continuous upgrades in technology and applications, it has gradually formed differentiated advantages in the highly competitive optoelectronic semiconductor industry.

However, the strategic vision of Jinko Electronics management does not stop at the traditional optical application level, but has begun to form a broader semiconductor industry chain extension of "optical + electricity".

On February 24, 2026, the board of directors of Jinko Electronics formally resolved to announce its intention to invest 268 million yuan as a limited partner (LP) to participate in the establishment of Guangzhou Tianze Jingxin Venture Capital Fund (hereinafter referred to as "Tianze Jingxin Fund") with a total scale of 668 million yuan.

According to the plan, the fund's main investment direction will focus on the integrated circuit industry ecology with third-generation semiconductors as the core, including related materials, devices and applications. This capital layout also marks that Jinko Electronics is further extending its strategic reach from the "photonic technology" represented by traditional LEDs to the field of "electronic technology" represented by power devices.

From a longer-term perspective, this step is an important signal for Jinko Electronics to extend its "LED+" strategy to a higher level. By participating in the investment and layout of the third-generation semiconductor industry chain, the company is expected to promote the further integration of optoelectronic technology and power electronics technology in the future, opening up new growth space for itself.

2. The evolution of Jinko Electronics’ “LED+” strategy and verification of financial resilience

The rationality of Jinko Electronics’ entry into third-generation semiconductors can first be analyzed in depth from its business foundation and financial capabilities. The reason why Jinko Electronics is able to devote a large amount of its own funds to participate in industrial investment is essentially due to the important transformation it has completed in recent years - upgrading from a traditional LED device supplier to an intelligent vision system solution provider with "LED+" technology.

The core of the "LED+" strategy proposed by Jinko Electronics is to deeply integrate LED technology with integrated circuits, electronic controls, software algorithms, sensors and precision optical systems to enter the field of smart vision applications with higher technical thresholds and higher added value.

Judging from the current business structure, Jinko Electronics has formed three relatively clear business segments. The overall structure is relatively even and it also has certain anti-cyclical capabilities. Among them, the automotive intelligent vision business is currently the most important growth engine, accounting for 41% of the company's overall revenue; the new display business (including Mini LED backlight and lamp driver integration and other technologies) and high-end lighting business (such as plant lighting, special lighting and other market segments) contributed 32% and 27% of revenue respectively. Such a business structure not only maintains the advantages of LED technology, but also disperses market risks in different application fields.

In the core automotive smart vision segment, Jinko Electronics has built a full industrial chain layout from car-grade LED devices, midstream modules to downstream smart car lighting systems. It not only improves cost control capabilities, but also quickly responds to the customized needs of car companies and provides cost-effective one-stop solutions. At present, Jinko Electronics has established in-depth cooperation with more than 20 domestic mainstream automobile OEMs and brands, including Geely, Lynk & Co, JK, GAC, Changan, and Ideal.

Based on existing customer resources, Jinko Electronics’ participation in the investment in the third-generation semiconductor industry chain can strengthen its industrial connections in the automotive electronics ecosystem to a certain extent and create more possibilities for future technical cooperation and product development. Not only that, collaborative development and enrichment of product structure will help Jinko Electronics improve its stickiness in the customer value chain.

The high added value brought by the "LED+" strategy is ultimately reflected in Jinko Electronics' continuously improving profitability.

According to the latest annual report, with the diversification of business layout and the increase in the proportion of high value-added products, Jinko Electronics' profitability has gradually improved amid fluctuations, demonstrating strong resilience against risks. According to the annual report, Jinko Electronics' board of directors has resolved to pay a final dividend of RMB 0.40 (tax included) for every 10 ordinary shares for the year ending December 31, 2025, totaling RMB 21.49 million in final dividends, pending approval at the company's annual general meeting of shareholders to be held on or before June 30, 2026.

The main reason for the rebound in profitability still comes from the company's industrial chain layout in the automotive intelligent vision business. By gradually opening up the vertical integration structure of "devices-modules-systems", Jinko Electronics' sales of automotive-grade devices and module products have achieved substantial growth in the second half of 2025; at the same time, the Mini LED backlight and plant lighting business has also further grown, driving overall profitability improvement.

In addition to growth at the operational level, Jinko Electronics' performance in the capital market has also attracted attention. On such an operating and capital basis, Jinko Electronics has used 268 million yuan of its own funds to participate in the establishment of the third-generation semiconductor industry fund. This can be regarded as a strategic extension to follow the trend, indicating that it is not blindly crossing borders when the main business is unstable, but on the premise that the core business still maintains growth, cash flow and capital strength are relatively sufficient, and it has begun to plan in advance new directions that may bring about technological synergy and industrial upgrading in the next stage.

3. Competitive advantage iteration that resonates with “product structure optimization and industrial ecology exploration”

From the perspective of the industry environment, Jinko Electronics’ entry into the third-generation semiconductor track is also a wise move. Currently, the domestic intelligent vision market has entered a highly mature stage. Price competition is becoming increasingly fierce, and overall profit margins continue to be compressed.

In such an environment, one important reason why Jinko Electronics can achieve steady growth in its core business lies in its continued advancement of the "LED+" strategy. The company has proactively invested more resources in high-end segmented application scenarios such as automotive-grade visual devices, Micro/Mini LED, plant lighting, and special lighting, maintaining rapid growth space.

Based on this, Jinko Electronics began to extend into the more upstream technology field of third-generation semiconductors through Tianze Jingxin Fund. From an industrial logic point of view, this is equivalent to participating in the key link of core power devices and drive modules in advance in future smart optoelectronic systems.

In many smart car lights, HUD or high-end display systems, driving power supplies and power modules often occupy a high proportion of BOM cost. If relevant technologies can form a closer collaborative relationship through industrial investment, the company will have greater initiative in core device procurement, technical solutions and system optimization in the future.

In other words, while competitors in the market still need to rely on the supply of standardized silicon-based power modules, Jinko Electronics has the opportunity to obtain SiC or GaN device solutions with higher performance and greater adaptability through industry collaboration. In the current environment where the automobile industry is generally facing price competition pressure, the advantages from the underlying core technology and supply chain can help enhance product differentiation capabilities and also provide a certain buffer space for the company's overall gross profit margin.

As the company's business gradually extends to automotive intelligent vision systems, power electronics and the third-generation semiconductor industry chain, its industrial positioning may change. If the market gradually regards Jinko Electronics as a company involved in both optoelectronic systems, power semiconductors, and hardware related to new energy and computing infrastructure, then the reference industries and growth expectations may also be adjusted in future valuations.

Of course, this change ultimately depends on whether the relevant investments can truly form industrial synergy and be transformed into actual business results. However, from the perspective of strategic layout, participating in the upstream semiconductor ecosystem through industrial funds does provide Jinko Electronics with a path to extend from traditional optoelectronic manufacturing to higher technology levels. If these arrangements are gradually realized, the company's market positioning and valuation system may also undergo new changes.

4. The structure and functional positioning of Tianze Jingxin Fund

Tianze Jingxin Fund, which focuses on this investment, reflects Jinko Electronics’ more prudent industrial investment ideas from the fund structure, investment ratio to governance arrangements. It can be said that it is a layout that integrates local resources through industrial capital while controlling investment risks.

It is worth noting that Jinko Electronics did not choose to directly acquire upstream semiconductor companies, nor did it incubate new semiconductor businesses within the company. Instead, it participated in fund operations through a limited partnership (LP) and jointly invested with a number of institutions with industrial backgrounds and state-owned assets.

In terms of investment structure, Jinko Electronics invested 268 million yuan, accounting for 40.12% of the total fund size. At the same time, the total investment ratio of state-owned industrial capital from Guangzhou City and Nansha District—including emerging funds, Nansha Kejin Group and other institutions—is close to 49.85%. In other words, with less than half of the capital, Jinko Electronics mobilized nearly half of the local state-owned assets to participate.

Further observation shows that this model is becoming more and more common in current semiconductor investment: local state-owned assets provide industrial platforms and policy resources, companies are responsible for industrial judgment and project coordination, and funds assume the capital operation function. For Jinko Electronics, this has two obvious benefits.

First, it is risk isolation. The third-generation semiconductor is still an industry with long investment cycle and high capital intensity. If it relies entirely on the enterprise's own investment, the cost of trial and error will be very high. By investing through funds, you can participate in more project opportunities while controlling individual risks.

Second, it is resource integration. The Tianze Crystal Core Fund’s landing in Nansha, Guangzhou has also formed a closer connection between Jinko Electronics’ industrial layout and local industrial policies. In recent years, Guangzhou is promoting the construction of the "12218" modern industrial system, and the Guangdong provincial level is also promoting the "Strong Core Project". The third-generation semiconductor is one of the key support directions.

Under such a policy environment, if companies participate in local industrial funds, they are often more likely to enter the local industrial ecosystem and obtain more resources in terms of industrial subsidies, talent introduction, industrial park supporting facilities, and infrastructure support. This invisible institutional dividend is usually an important reason why industrial capital is willing to cooperate with local governments.

From this perspective, Jinko Electronics’ participation in the establishment of the Tianze Jingxin Fund is based on the existing optoelectronics business, using capital tools to enter the third-generation semiconductor industry network in advance, and to reserve space for future technology collaboration and industry extension.

Looking at the cycle of its operating mechanism, the semiconductor industry, especially automotive-grade wide-bandgap semiconductors, is itself a typical long-cycle industry. From underlying materials, growth and substrate preparation, to device design, tape-out manufacturing, to passing rigorous reliability testing and completing OEM certification, the entire process usually requires multiple stages. Especially in the field of vehicle regulations, products must pass the extremely strict AQG324 reliability certification system before they can finally enter vehicle mass production (SOP). From research and development to actual implementation, it usually takes 3-5 years or even longer.

Because of the long cycle and large investment, such projects often go through the so-called "Valley of Death" stage: a lot of money has been invested in the technology, but there is still a distance from commercialization. Traditional PE/VC investments are often oriented towards short-term returns, and there is not much room for error when faced with such hard technology projects. Therefore, without longer-term funding arrangements, it is difficult to truly support the growth of the underlying technology.

At this point, the structural design of Tianze Jingxin Fund obviously takes into account the cyclical characteristics of the semiconductor industry. The basic duration of the fund is 7 years, of which 4 years are the investment period and 3 years are the exit recovery period. At the same time, in order to cope with possible delays in technology or industrialization progress of semiconductor projects, the fund also reserves a two-year extension period during the exit phase; under special circumstances, it can be further extended appropriately with the consent of all partners.

In other words, the life cycle of the entire fund can be up to 7-9 years, which is rare in the current capital market, but it matches the time rhythm of semiconductor technology from research and development to industrialization, providing relatively stable long-term financial support for early hard technology projects, which is the "patient capital" often mentioned in recent years.

Regarding the income distribution mechanism, the fund also sets relatively strict financial protection terms. The overall principle is to "recover capital first, then distribute profits." Only after the fund first recovers all paid-in capital and reaches the 10% annualized threshold rate of return (Hurdle Rate) will the excess income begin to be distributed. According to the agreement, the manager can withdraw 5% of the performance compensation from the excess income, and the remaining 95% will be distributed according to the proportion of each partner's capital contribution.

For Jinko Electronics, this structure guarantees its financial safety margin as the main LP to a certain extent. In other words, as long as the investment project does not suffer major losses, the company's principal investment and basic income are in a priority position. This shows that although Jinko Electronics is trying to enter the more technically challenging semiconductor field, it still maintains relatively prudent risk control in terms of financial arrangements.

In terms of fund governance, Tianze Jingxin Fund has established an Investment Decision-making Committee (IC), consisting of 5 members.