华虹半导体2023年年度报告

(Incorporated in Hong Kong with limited liability)(Stock Code: 01347)（股份代號：01347）（於香港註冊成立之有限公司） CONTENTS Definitions2Key Financials7Letter to Shareholders8Corporate Information10Directors and Senior Management Team13Corporate Governance Report23Directors’ Report352023 Environmental, Social and Governance Report68Independent Auditor’s Report271Consolidated Statement of Profit or Loss279Consolidated Statement of Comprehensive Income280Consolidated Statement of Financial Position281Consolidated Statement of Changes in Equity283Consolidated Statement of Cash Flows285Notes to Financial Statements287Five Year Financial Summary392 DEFINITIONS DEFINITIONS ShanghaiHuahong(Group)Co.,Ltd.(（）),a companyincorporated in the PRC on 9 April 1996 as Shanghai Hua Hong MicroelectronicsCo., Ltd. and renamed as Shanghai Huahong (Group) Co., Ltd. in 1998, and asignificant shareholder of our Company; the framework agreement dated 30 December 2022 entered into between theCompany and Huahong Group to regulate the sales and purchase transactions andprovision of services between the Group and Huahong Group, its subsidiaries orassociates (as defined under Chapter 14A of the Listing Rules) for the year ending31 December 2023; Shanghai Huahong Real Estate Co., Ltd. (), a companyincorporated in the PRC on 28 October 2011 and a wholly-owned subsidiary ofHuahong Technology Development; Shanghai Huahong Technology Development Co., Limited (), a connected person, a company incorporated in the PRC on 10 May 2010, anda company 50% held by and consolidated with Huahong Group and 50% held byHHGrace; Shanghai Huali Integrated Circuit Corporation (),a company incorporated in the PRC on 8 August 2016. Its Shareholders includeShanghai Huali Microelectronics Corporation, Shanghai Integrated Circuit IndustryInvestment Fund Co., Ltd. and China Integrated Circuit Industry Investment FundCo., Ltd.; Shanghai Huali Microelectronics Corporation (), a companyincorporated in the PRC on 18 January 2010 and a connected person; Hua Hong Semiconductor Manufacturing (Wuxi) Co., Ltd.* (（）), a company incorporated in the PRC on 17 June 2022 and a non-whollyowned subsidiary of the Company; Hua Hong Semiconductor (Wuxi) Limited, a company incorporated in the PRCon 10 October 2017 and held 51% by the Group. Upon completion of the CapitalInjection Agreement, the registered capital of Hua Hong Wuxi shall increase fromUS$1,800 million to approximately US$2,536.85 million and Hua Hong Wuxi remainsa non-wholly owned subsidiary of the Company held as to approximately 22.22%,28.78%, 20.00%, 20.58% and 8.42% by the Company, HHGrace, Wuxi Xi HongLian Xin, China IC Fund and China IC Fund II, respectively; DEFINITIONS KEY FINANCIALS LETTER TO SHAREHOLDERS Dear Shareholders, Looking back at 2023, it was an exceptionally rare, significant, and milestone year in the development history of HuaHong Semiconductor, given the challenging and complex external environment, volatile market conditions, and alabyrinthine competitive landscape where opportunities and challenges coexisted. The two major manufacturing basesin Shanghai and Wuxi acted as mighty wheels, steering with stability. Upholding the beliefs of “Courage, Perseveranceand Unity”, our entire workforce converged together to form an unstoppable force. Overcoming obstacles withdetermination, we not only navigated the market’s ups and downs smoothly, but also wrote a new glorious chapterin the pursuit of harmony and sustainable development. With the advantages of our “8-inch + 12-inch” strategy, theCompany stayed committed to continuous innovation of specialty technologies and developed core competitiveness ofproducts using our specialty platforms, including Embedded/Standalone Non-Volatile Memory, Power Discrete, Analog& PM, and Logic & RF. We persisted in our forward-looking “Specialty IC + Power Discrete” dual-pronged strategy,rapidly penetrated downstream emerging markets, including communication, new energy, Internet of Things, andautomotive electronics, continuously providing excellent products and services for our global customers. In the dynamic summer of 2023, Hua Hong Semiconductor was officially listed on the STAR Market, joining the ranks of“A+H” dual-listed companies and forging a closer bond with the capital market. Seizing this opportunity, we are poisedto drive rapid scaling of our 12-inch production line, pursue excellence in our 8-inch production line, and conduct in-depth research and development on specialty technologies. Confronted with severe challenges during the ReportingPeriod, such as the slowdown in global economic growth, declining market demand, and rising costs of raw materialsand labor, revenue of the Company was US$2,286.1 million, a decrease of 7.7% compared to the year 2022. Theoverall gross profit margin was also subject to challenges, decreasing 12.8 percentage points to 21.3% compared tothe previous year. Despite such a challenging market environment, Hua Hong Semiconductor ha