Sanan Optoelectronics controller detained, hit limit down this morning

March 23, 2026

Word count: 1,456, estimated reading time: about 2 minutes

Author | First Financial Wang Zhen

San’an Optoelectronics (600703.SH) opened with a limit-down on March 23, with its stock price dropping 9.98% to 14.89 yuan per share, and its market value shrinking from over 80 billion yuan to 74.29 billion yuan. This leading LED chip company is currently caught in a whirlpool involving its actual controller being detained and under investigation.

According to its announcement on the evening of March 22, San’an Optoelectronics received notice from its major shareholder, San’an Group, that on March 21, the company was informed by the National Supervisory Commission that its actual controller, Lin Xiucheng, had been detained and was under investigation. Since July 2017, Lin Xiucheng has not held any position in the company.

San’an Optoelectronics stated that the company’s production and operations are normal, and the above matter will not have a significant impact on its business.

First Financial reporter attempted to inquire about details of Lin Xiucheng’s detention on March 23. San’an Optoelectronics also clarified that this investigation involves San’an Group and is unrelated to the listed company. The company’s operations, order deliveries, financial status, and internal controls are all normal, with no issues such as fund occupation or illegal guarantees. All information is subject to official company announcements.

Lin Xiucheng’s family still controls San’an Optoelectronics

Born in 1956, Lin Xiucheng is from Anxi County, Quanzhou City, Fujian Province. He is currently Chairman and General Manager of Fujian San’an Group Co., Ltd. He has a legendary entrepreneurial history, having ventured into industries from steel to LED chips, and then to compound (third-generation) semiconductors, often facing skepticism along the way.

In the 1980s, Lin Xiucheng made his first fortune by acquiring scrap steel and waste materials. In 1992, he co-founded San’an Ironmaking Plant with Fujian Sanming Steel Factory. In 1999, after encountering LED technology at the Shenzhen High-Tech Fair, he decided to shift to the semiconductor industry. In 2000, he established San’an Optoelectronics Co., Ltd., and in 2002, successfully developed its first epitaxial wafer. In 2008, San’an Optoelectronics went public via a backdoor listing.

Nine years ago, issues with San’an Group’s financial violations were exposed. In 2017, due to tight cash flow, abnormal prepayments, and non-operational related party funds, regulators issued multiple inquiries. At that time, Lin Xiucheng quickly resigned from his positions in the listed company to cut risks. Industry speculation suggests that the detention may involve past issues such as misappropriation of funds.

In 2017, Lin Xiucheng handed over the reins of San’an Optoelectronics to his eldest son, Lin Zhiqiang. Since then, the company has been expanding into emerging industries such as compound semiconductors and microwave integrated circuits.

Currently, the controlling shareholder of San’an Optoelectronics is Xiamen San’an Electronics Co., Ltd., a subsidiary of San’an Group, holding 24.33%. The actual controller is Lin Xiucheng, with a 10.72% stake. Chairman Lin Zhiqiang is Lin Xiucheng’s eldest son; Vice Chairman and General Manager Lin Kechuang is Lin Xiucheng’s son-in-law; Director and Vice General Manager Lin Zhidong is Lin Xiucheng’s younger son. The family still maintains dominant control over San’an Optoelectronics.

Expanding into third-generation semiconductors but facing losses

San’an Optoelectronics is a leading Chinese LED chip manufacturer that has recently been actively expanding into third-generation semiconductor businesses. Last year, its performance was under pressure, with projected net losses attributable to shareholders for 2025 between 200 million and 400 million yuan, and non-recurring net losses between 750 million and 850 million yuan.

Regarding last year’s expected losses, San’an Optoelectronics explained that while high-end LED product share increased and revenue and profitability of the integrated circuit business improved year-on-year, the filter and silicon carbide segments still dragged down profits. Additionally, government subsidies decreased, R&D expenses increased, and sales of precious metal waste at prices differing from Shanghai Gold Exchange trends reduced investment income.

An industry veteran analyzed to First Financial that chip manufacturing costs are high, and producing low-value-added products can impact profitability.

Since Lin Zhiqiang took over as Chairman in 2017, San’an Optoelectronics has accelerated its development in the compound semiconductor sector. In 2023, the company signed a silicon carbide project cooperation agreement with STMicroelectronics, with large-scale shipments expected in 2025. It has made breakthroughs with automotive-grade products and key clients in new energy vehicles, and its Micro LED products have entered small-batch testing for AI/AR glasses.

During its development of the compound semiconductor business, the National Big Fund once invested in San’an Optoelectronics and later exited. The fund provided multiple rounds of capital injections, and local state-owned platforms also participated in private placements and provided credit support.