Haichuan Intelligence, a long-standing manufacturer of mundane automatic weighing machines, has become the latest entity to succumb to the allure of China’s 'chip fever.' By pledging 130 million yuan for a minority 15.3% stake in Nanjing Jiyi, a loss-making startup specializing in gallium arsenide (GaAs) wafers, Haichuan is attempting a radical strategic pivot. The move reflects a growing trend among mid-cap Chinese firms seeking to escape stagnant traditional industries for the high-tech frontiers prioritized by Beijing's industrial policy.
The financial backdrop for this 'border-crossing' venture is notably bleak. Haichuan’s net profit plummeted by more than 50% in 2025, a slide that has persisted into the first quarter of 2026 despite a slight recovery in top-line revenue. Its target, Nanjing Jiyi, is equally troubled; the semiconductor firm recorded a net loss of over 28 million yuan last year and continues to suffer from negative operating cash flow. Despite these red flags, Haichuan is paying a significant premium over the target's book value, banking on a 'second growth curve' in the semiconductor materials space.
This phenomenon is far from an isolated incident. Throughout the first half of 2026, the A-share market has witnessed a parade of listed companies—ranging from forestry product manufacturers to lighting specialists and furniture makers—forcefully cutting into the semiconductor supply chain. These firms are utilizing cash reserves to acquire assets in storage modules, high-end electronic materials, and integrated circuits, often with little to no prior industry expertise or technical synergy with their core operations.
While diversification is a classic corporate strategy to mitigate risk, the current wave of cross-industry acquisitions in China carries a distinct air of speculative urgency. For firms already struggling with core business operations, the high capital intensity and steep learning curve of the semiconductor industry present a formidable challenge. Analysts warn that without a clear integration strategy, these moves may lead to further financial instability rather than the high-tech salvation these companies desperately seek.