Benzinga | Aug 11, 2021 07:09AM EDT

Canaan Reports Its Hangzhou Canaan Creative Info Technology To Make $3.1M Cash Investment In Pixelworks' Semi Technology Unit In Exchange For Equity Interest In Pixelworks Semi Technology

Canaan Inc. (NASDAQ:CAN) ("Canaan" or the "Company"), a leading high-performance computing solutions provider, today announced that the Company through its wholly-owned subsidiary, Hangzhou Canaan Creative Information Technology Limited, has entered into an agreement with Pixelworks Semiconductor Technology (Shanghai) Co., Ltd.("PWSH"), a subsidiary of Pixelworks, Inc. (NASDAQ:PXLW) ("Pixelworks") to invest approximately US$3.1 million in cash in exchange for an equity interest in PWSH (the "Investment"), subject to certain closing conditions.

Canaan's investment in PWSH is under a Capital Increase Agreement that Pixelworks and PWSH entered with certain private equity and strategic investors besides Canaan (collectively, the "Investors"), in addition to an ESOP program of PWSH.

Under the Capital Increase Agreement, PWSH has also agreed to attempt to complete all requirements to qualify to file an application for a qualified initial public offering (the "QIPO") such that the QIPO is consummated prior to June 30, 2024, for the Investors.

Pixelworks is a NASDAQ-listed company that provides industry-leading content creation, video delivery and display processing solutions and technology that enable highly authentic viewing experiences with superior visual quality, across all screens -- from cinema to smartphone and beyond. PWSH designs, manufactures and sales visual display processing semiconductors and custom application specific integrated circuits ("ASIC") solutions for video applications, advanced media processing, and the efficient delivery and streaming of video in the target markets of smartphones, tablets, digital projection systems, high-quality video infrastructure equipment, and over-the-air streaming devices.

Mr. Nangeng Zhang, Chairman and Chief Executive Officer of Canaan, commented, "Among other distinguished investors, we are pleased to reach the investment agreement with Pixelworks. We are also impressed by PWSH's strong internal confidence reflected by its ESOP program. As a subsidiary of an outstanding NASDAQ-listed company, PWSH proved to be an attractive investee with a pioneering role in the visual solution space. We like PWSH's influential market share in the vertical, established brand equity among electronics manufacturers, strong sales capabilities, cutting-edge technologies and solutions, as well as robust growth potential."

"This investment reaffirms our strategy of further expanding Canaan's compelling computing power beyond cryptocurrency mining to AI solutions. Featured with our Kendryte series products, we are committed to furthering R&D efforts and expanding the usage scenarios of our AI business. We look forward to leveraging our advantages to unlock synergies with PWSH on ASIC and edge computing applications in the massive market of image processing and visual solutions," Mr. Zhang concluded.