New R&D Funding and technical support agreements

18.03.14

Dynex signs new R&D funding and technical support agreements

Lincoln, England, March 18th, 2014 – Dynex Power Inc., a leading specialist high power semiconductor company, today announced that two new agreements have been signed with its majority shareholder, Zhuzhou CSR Times Electric Co., Ltd., to share the costs of carrying out R&D projects for high power semiconductor devices and to provide technical assistance to CSR Times Electric’s new IGBT fabrication facility in China. These new agreements provide continuity to arrangements that expired at the end of last year.

Originally, Dynex and CSR Times Electric signed a forty-month agreement on the funding of the R&D Centre in Lincoln covering the period September 2010 to December 2013. The new R&D agreement covers the funding of the R&D Centre for the period January 2014 to December 2016. It is estimated that the cost of the R&D Centre will be £19.9 million and it is agreed that CSR Times Electric will provide funding for 80% of the costs and that Dynex will contribute 20%. Under the agreement, CSR Times Electric will be making an advance payment of approximately £4.0 million.

The R&D Centre will continue to concentrate on developing new products and technologies to meet the growing demand for power semiconductor products both in China and the rest of the world. Key market sectors targeted will be railway transportation, wind power, smart grids and electric cars; key products will be IGBT modules, high power thyristors and silicon carbide power devices.

Dynex and CSR Times Electric signed a three-year agreement on technical support in January 2011. The new technical assistance agreement covers further technical support for the period January 2014 to December 2016. It is estimated that CSR Times Electric will pay Dynex £2.6 million for support over this period including an advanced payment of approximately £500,000. Under the new agreement, Dynex will provide technical support for the development and ramp up of CSR Times Electric’s new IGBT fabrication facility in China. In the future, Dynex will have access to this new, low cost, high volume, medium power facility to complement its own IGBT fabrication facility in the UK which will concentrate on supplying lower volume, higher power modules.

Dr. Paul Taylor, President and Chief Executive Officer said, “I am delighted to have reached agreement on the further funding of the R&D Centre and on the provision of technical assistance to CSR Times Electric. The R&D funding agreement enables us to expand further the R&D work we are doing. This will underpin the development and the growth of the business in the medium and long-term. The technical assistance agreement provides Dynex with a continuing source of revenue and helps ensure that we will have access to a low cost, medium power fabrication facility in the future.”

Bob Lockwood, Finance Director and Chief Financial Officer, added, “The new R&D agreement continues the successful arrangement that has been in place for the last forty months and enables us to expand further the work we do in R&D. The technical assistance agreement likewise enables us to extend a successful collaboration with CSR Times Electric and will provide us with access to new markets in the future. ”