On the evening of November 28, 2025, Hunan Goke Microelectronics Co., Ltd. (Goke Micro) and Semiconductor Manufacturing International Corporation (SMIC) jointly announced the termination of a six-month-long asset restructuring plan. Previously, Goke Micro had intended to acquire a 94.366% stake in SMIC's subsidiary, SMIC Integrated Circuit (Ningbo) Co., Ltd. (SMIC Ningbo), through a combination of share issuance and cash payment. The abrupt halt to this acquisition reflects the complexities of industry consolidation, strategic corporate considerations, and a rational recalibration in capital markets.
**Termination Reasons: Divergent Expectations and Financial Pressures** According to the announcement, the deal was called off due to "failure to reach consensus on key transaction terms within the expected timeframe." Initiated in June 2025, the acquisition had been highly anticipated: SMIC Ningbo, one of the few domestic wafer foundries with advanced BAW filter manufacturing technology, operates 6-inch and 8-inch production lines specializing in RF front-end and MEMS sensor processes. This was seen as a potential "design + manufacturing" synergy with Goke Micro's digital chip design business. However, reality fell short of expectations.
Financial data revealed core contradictions: Despite its technological edge, SMIC Ningbo has been consistently unprofitable. From 2023 to Q1 2025, its revenue stood at RMB 213 million, RMB 454 million, and RMB 108 million, respectively, while net losses accumulated to over RMB 1.8 billion. Meanwhile, Goke Micro's own financial health is concerning—Q1-Q3 2025 revenue dropped 2.50% YoY to RMB 1.172 billion, with net profit plunging 89.42% to RMB 7.4 million and a Q3 standalone loss of RMB 12.71 million. Forcing consolidation could have exacerbated financial risks for Goke Micro.
**Market Reaction: Short-Term Stability vs. Long-Term Strategy** Post-announcement, Goke Micro's stock remained stable, indicating market anticipation of the outcome. Investor focus shifted to the company's operational performance: Q3 2025 revenue grew 22.6% YoY to RMB 431 million, with losses narrowing by nearly 60% QoQ, signaling a gradual recovery. The company also disclosed R&D spending of RMB 518 million (44.24% of revenue) for the first three quarters.
**Industry Insights: A "Rational Retreat" in Supply Chain Integration** The failed acquisition offers key takeaways for semiconductor consolidation: 1. **Technical synergy ≠ commercial success**: Integration must be grounded in achievable synergies, not just theoretical complementarity. 2. **Financial viability dictates integration limits**: During industry downturns, acquiring loss-making assets requires rigorous cash flow and debt capacity assessments.
With the deal terminated, Goke Micro avoids high-risk integration but misses a strategic opportunity to enter chip manufacturing. Short-term, it must rely on R&D and core business recovery to prove sustainability; long-term, building moats in AI and automotive electronics will be critical to overcoming growth bottlenecks. This "unfinished M&A" may epitomize China's semiconductor sector transitioning from "scale expansion" to "quality-first" development.
*Note: This article incorporates AI-generated content. Views expressed are for reference only and do not constitute investment advice. Market risks apply.*
Comments