• Priority given to downstream strategic investors
• Majority of clients based in Greater China; suppliers in Japan
• Likely to continue expanding in the US, Japan, and South Korea

Thinktrans (Xin Chuang Yuan), a Wuhan, China-based manufacturer of integrated circuit (IC) substrates, is seeking to raise CNY 500m to CNY 1bn (USD 72.45m to USD 144.9m) in Series A funds, Yong Zhao, the company’s chief executive officer (CEO), told this news service.

The company, whose valuation is undisclosed, will use the proceeds to purchase manufacturing equipment and materials, according to the CEO.

Lighthouse Capital, a Shanghai-headquartered boutique investment bank was mandated as the financial advisor (FA) for this round, according to an internal pitch deck seen by this news service.

The startup is open to getting in touch with financial and strategic investors both in China and overseas, while giving priority to downstream strategic investors such as integrated device manufacturers (IDM) and outsourced semiconductor assembly and test (OSAT) vendors, as there could be potential business synergies, Zhao said.

He further noted that financial investors with knowledge of the semiconductor supply chain or who have previously invested in relevant projects are also welcome.

In July 2021, ThinkTrans closed a CNY 500m angel round, which saw the participation of investors including Qiming Venture Partners, Lenovo Capital and Incubator Group, Gaorong Capital, Jiufite Private Equity, and THG Ventures, according to Chinese corporate database Qimingpian. 

The IC substrate is a type of baseboard material used in the packaging of bare IC chips. Its main functionalities include protecting the bare IC and facilitating its connection with the circuit board.

Overseas client base and supply chain

In terms of business model, Thinktrans designs and manufactures IC substrates in-house and sells them directly to three groups of clients: IDMs, OSATs, and design houses.

While most Thinktrans’ clients are based in Greater China, the CEO has also identified the US, Japan, and South Korea as potential markets for continued expansion. 

Thinktrans’ upstream suppliers comprise two groups: equipment and materials suppliers. On the equipment side, Thinktrans sources over 50% of its equipment from Japan, while the rest comes from South Korea, Israel, Germany, mainland China, and Taiwan.

On the materials side, the startup sources dry film, ink, base material, and others primarily from Japan, in addition to mainland China, South Korea, and Germany, he noted.

Ion implantation for IC substrates

Led by Zhao with over two decades of experience in semiconductor display and packaging, Thinktrans provides cost-efficient solutions to IC substrates production using ion implantation and additive technologies, according to the pitch deck.

The startup has applied for a total of 90 patents in markets including the US, Japan, mainland China and Taiwan, of which 57 have been licensed, said Zhao.

The ion implantation technique is more commonly used in the production of semiconductor wafers to enable the surface modification of semiconductor materials. Thinktrans’ ion implantation technique is a similar coating method that introduces metal into the substrate to enhance cohesion, according to the CEO.

The majority of Thinktrans’ patents are related to ion implantation, which offers advantages over other methods as it allows for more precision and control while reducing costs, he added.

Thinktrans, with over 200 employees working across research and development (R&D), manufacturing, and sales and marketing, identifies Japan’s Ibiden [TYO:4062], South Korea’s Samsung Electro-Mechanics [KRX:009150] and Taiwan’s Unimicron and Austria’s AT&S [VIE:ATS] as leaders in the field of IC substrate that Thinktrans aspires to catch within the long run, Zhao noted.

The global advanced IC substrates market was valued at USD 7.73bn in 2020, and it is expected to reach USD 12.24bn by 2027, recording a CAGR of 6.85% over the forecast period 2022-2027, according to Mordor Intelligence, a research firm.

Yong Zhao obtained his bachelor’s degree from the Department of Precision Instrument at Tsinghua University and his executive Master of Business Administration (EMBA) degree from China Europe International Business School. Prior to founding Thinktrans in 2021, Zhao served as the vice president at Chinese electronics company TCL Technology, according to the pitch deck.