Luxiao Technology scrapped two SiC fundraising projects after raising nearly RMB 3.2 billion, with most of the money redirected to liquidity and debt repayment
Luxiao Technology said on July 7 that it had terminated two silicon carbide fundraising projects tied to its 2021 private placement and would permanently redirect the remaining RMB 1.217 billion to working capital. In the eight trading days after the announcement, the company’s share price fell by nearly 40%. A review of its two private placements shows that Luxiao raised about RMB 3.2 billion in total, with net proceeds of roughly RMB 3.156 billion, yet only about RMB 242 million was actually put into silicon carbide equipment, production line construction and R&D. The rest, around RMB 2.9 billion, was used through permanent working-capital replenishment, temporary liquidity support, or bank debt repayment. The company has insisted it is not exiting silicon carbide. Instead, it says it will continue to push ahead with 8-inch and 12-inch SiC substrate operations using its own funds or self-raised capital. That stance comes as the industry has already shifted from 6-inch wafers toward 8-inch production and is moving into 12-inch development. The report also points to unresolved questions around Luxiao’s real production capacity, the pace of project execution, the level of R&D spending, and disclosures tied to its chief scientist Chen Zhizhan. Set against the company’s longer history of fundraising, acquisitions and repeated moves into hot sectors, the failed industrialization effort has become a fresh test of how its capital allocation and strategic promises are being judged by the market.
