DNeX settles SilTerra dispute; Chinese fund to put in RM100m
- DNeX, DNeX Semiconductor and SilTerra settled every court case and arbitration with the CGP Fund’s Tethystronics and Mimastronics by a consent order on 8 October 2026, with no compensation beyond reimbursed legal costs.
- Mimastronics will subscribe for RM100 million of redeemable convertible preference shares in DNeX Semiconductor, which owns 60% of SilTerra, subject to a MITI or MIDA no-objection; fully converted, they would give it about 33.33%.
- Derived: full conversion would cut DNeX’s effective interest in SilTerra from 60% to about 40% and lift the CGP Fund’s to about 60%, though DNeX Semiconductor would still hold 60% of SilTerra directly.
Dagang NeXchange Bhd (DNeX) has settled its four-year legal fight with its Chinese partner in SilTerra Malaysia Sdn Bhd, the wafer foundry at Lot 8, Phase II, Kulim Hi-Tech Park. Under a consent order recorded at the Kuala Lumpur High Court on 8 October 2026, every court case and arbitration between the two sides ends, no compensation is paid apart from reimbursed legal costs, and the Chinese side's Mimastronics Technologies will put RM100 million into DNeX Semiconductor Sdn Bhd, which owns 60% of SilTerra.
The settlement
- The parties: DNeX, its wholly owned DNeX Semiconductor and SilTerra on one side; Tethystronics Technologies Co Ltd (TTCL), which owns the other 40% of SilTerra, and its subsidiary Mimastronics on the other. Both are ultimately held by the Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center (CGP Fund)
- The money: Mimastronics will subscribe for 5,000 redeemable convertible preference shares in DNeX Semiconductor at RM20,000 each, RM100 million in total, replacing the irredeemable preference shares it agreed to take in January 2022
- The condition: a no-objection or confirmation from the investment ministry (MITI) or MIDA
- Conversion: the shares turn into ordinary shares only if DNeX Semiconductor chooses not to redeem them after set anniversaries. Fully converted, Mimastronics would own about 33.33% of DNeX Semiconductor, which would remain a DNeX subsidiary
- Use of the money: strengthening SilTerra's finances and investing in capacity, technology and silicon photonics
What conversion would mean
Derived from the filing: if all the shares were converted, DNeX's effective interest in SilTerra would fall from 60% to about 40% (two-thirds of DNeX Semiconductor's 60%), while the CGP Fund's would rise from 40% to about 60% (its 40% direct stake plus a third of DNeX Semiconductor's 60%). DNeX Semiconductor would still hold 60% of SilTerra directly. SilTerra's manufacturing licence requires at least 55% of the company to be owned by a Malaysian entity, a condition DNeX cited in 2022.
How the fight started
- 31 March 2021: DNeX and the CGP Fund agreed to buy 60% and 40% of SilTerra from Khazanah Nasional, and committed to raise RM120 million in SilTerra
- January 2022: Mimastronics agreed to subscribe for RM100 million of irredeemable convertible preference shares in DNeX Semiconductor to fund that commitment
- 17 November 2022: DNeX Semiconductor started arbitration against Mimastronics over the investment
- 14 December 2022: TTCL started arbitration against DNeX Semiconductor and SilTerra over the make-up of SilTerra's board, then filed court action as well
- January 2025: the arbitrator ruled for TTCL, finding that additional directors had been appointed to SilTerra's board in breach of the shareholders' agreement; in March 2025 DNeX applied to the High Court to set the award aside
- 8 October 2026: the global settlement ends all of it
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