Innominex claims RMB 170 million from A-share packaging company, Changdian accuses Innominex of defaulting on its debt

Wu Blockchain learned that the mining machine company Innosilicon filed a lawsuit against A-share listed company and China's leading chip packaging company Changdian Technology, claiming US$25 million, equivalent to about RMB 174 million.

Changdian Technology received the "Notice of Response" on April 30. Innosilicon stated that it signed the "Contract for Entrusted Chip Packaging Design and Processing" with Changdian in March 2018, providing chip packaging services to Innosilicon. Due to unqualified packaging quality, the chip could not work properly, resulting in a loss of $14,151,390 in incoming materials, and a loss of $12,864,130 in chips and inventory wafers temporarily detained by the company, totaling $25 million in losses.

Changdian said that at the end of March 2018, Innosilicon should have paid $8 million in testing fees, and $13.25 million in June, but Innosilicon refused to pay due to unqualified quality. Changdian Technology will also protect its rights and interests in accordance with the law. At the beginning of 2018, the price of Bitcoin was as high as $17,000, but it fell to $9,000 in March and even to $6,000 in June. Therefore, Changdian Technology seems to be saying that Innosilicon refused to pay because of the sharp drop in the market.

Packaging is an important step before mass production of chips. Simply put, after design and manufacturing, the IC chip needs to be installed in a larger shell and placed on the circuit board. This is packaging. Compared with tape-out and manufacturing, packaging technology is less difficult, so Chinese companies have already occupied a certain market share. Currently, the largest single shareholder of Changdian Technology is SMIC.

This is not the first time that mining machine manufacturers have had disputes with local chip manufacturers. In December 2019, Hong Kong Bit Co., Ltd., a subsidiary of Ebang Hong Kong, sued VeriSilicon (Hong Kong) Co., Ltd., a wholly-owned subsidiary of VeriSilicon Microelectronics (Shanghai) Co., Ltd., in the Hong Kong High Court, claiming that the 2,589 10nm Samsung wafers provided by the defendant to the plaintiff had quality defects, resulting in the plaintiff's loss of approximately US$25.07 million, or approximately RMB 175 million.

Changdian Technology achieved operating revenue of RMB 23.526 billion in 2019, but the net profit attributable to shareholders of the listed company was only RMB 89 million. In the first quarter of 2020, the revenue was RMB 5.708 billion and the net profit was RMB 134 million, both of which were the highest in the first quarter in the past five years.

Attached is the full text of the announcement: