1032-00003 · Client 1032 · Registration Statement

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DRAFT — PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT

RISK FACTORS

Calderwood & Harkness LLP — Working Draft — March 9, 2026 Prepared by: Claire Dempsey (Lead Associate), Audrey Zhou (Working Associate) Responsible Partner: Vivienne St. Claire Matter No.: 1032-00003 Subject to review by Halcyon Semiconductor AG, Bähr Stein Rechtsanwälte, and Varen & Kessler LLP (underwriters' counsel)

Investing in our ADSs involves a high degree of risk. You should carefully consider the following risk factors, together with all of the other information contained in this prospectus, including our consolidated financial statements and related notes thereto appearing elsewhere in this prospectus, before deciding to invest in our ADSs. Any of the following risks could have a material adverse effect on our business, financial condition, results of operations, and prospects. In such case, the trading price of our ADSs could decline and you may lose all or part of your investment.

The risks described below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition, results of operations, and prospects. In any such case, the trading price of our ADSs could decline, and you could lose all or part of your investment. You should also read and consider the information set forth in the sections of this prospectus entitled "Cautionary Statement Regarding Forward-Looking Statements," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and our consolidated financial statements and related notes included elsewhere in this prospectus.

In this prospectus, references to "Halcyon," the "Company," "we," "us," and "our" refer to Halcyon Semiconductor Aktiengesellschaft (an Aktiengesellschaft organized under the laws of the Federal Republic of Germany) and, unless the context otherwise requires, its consolidated subsidiaries. Each American Depositary Share, or ADS, represents two ordinary shares (Stammaktien) of Halcyon. Our ADSs are to be listed on the Nasdaq Global Select Market under the ticker symbol "HCYN."

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I. Risks Related to Halcyon's Business and the Semiconductor Industry

A. Technology and Product Risks

1. Our future growth depends on the continued adoption of silicon carbide (SiC) and gallium nitride (GaN) power semiconductor technologies, which may not occur at the rate we anticipate or at all.

Halcyon designs and manufactures advanced power semiconductor devices based on silicon carbide (SiC) and gallium nitride (GaN) wide-bandgap semiconductor technologies. Our products serve critical applications across the automotive, industrial, and renewable energy sectors, including electric vehicle powertrains, onboard chargers, industrial motor drives, solar inverters, and wind turbine power conversion systems. Our business strategy and long-term financial projections are premised on the expectation that adoption of wide-bandgap semiconductor technologies will continue to accelerate in these end markets over the next several years.

However, market adoption of SiC and GaN power semiconductor technologies remains subject to considerable uncertainty. Although these technologies offer significant theoretical advantages over traditional silicon-based power devices — including higher efficiency, greater power density, and superior thermal performance — the ultimate pace and extent of their commercial adoption depend on a wide range of factors, many of which are beyond our control. These factors include, among others:

• the relative cost-effectiveness of SiC and GaN devices compared to traditional silicon-based alternatives, including insulated gate bipolar transistors (IGBTs) and silicon metal-oxide-semiconductor field-effect transistors (MOSFETs), particularly as silicon device manufacturers continue to improve performance and reduce costs;

• the development and commercial viability of competing wide-bandgap materials, such as diamond, aluminum nitride, and gallium oxide, which could provide superior performance characteristics in certain applications and divert demand away from SiC and GaN solutions;

• the pace of adoption of electric vehicles by consumers and fleet operators, which is influenced by government subsidies and incentive programs, charging infrastructure availability, battery cost and range improvements, and consumer preferences;

• capital investment decisions by industrial equipment manufacturers and renewable energy developers, which are sensitive to macroeconomic conditions, interest rates, commodity prices, and regulatory policy; and

• the availability of adequately trained design engineers at our customers' organizations who are capable of integrating SiC and GaN devices into end-product designs, as the transition from silicon-based designs requires meaningful engineering effort and organizational commitment.

If automotive original equipment manufacturers (OEMs), Tier 1 suppliers, industrial customers, or renewable energy producers delay or reduce their adoption of SiC- and GaN-based power semiconductor solutions for any of these reasons or others, our revenue growth projections could be materially impaired. Our financial projections contemplate a revenue compound annual growth rate (CAGR) of approximately 9.0% between FY2023 and FY2025, from approximately €3,214 million to approximately €3,820 million. These projections are predicated on continued expansion of the addressable market for wide-bandgap semiconductors. If the market for SiC and GaN devices grows more slowly than we anticipate, or if our competitors capture a disproportionate share of market growth, our revenue, profitability, and long-term growth prospects could be materially adversely affected.

2. Our research and development investments may not result in commercially viable products or technologies.

We invest significant resources in research and development (R&D) in order to develop next-generation power semiconductor technologies, improve the performance and cost-effectiveness of our existing products, and maintain our competitive position in the rapidly evolving semiconductor industry. We intend to allocate approximately $140,000,000 of the net proceeds from this offering to R&D activities focused on next-generation GaN power devices and advanced packaging technologies, as more fully described in "Use of Proceeds" elsewhere in this prospectus.

Semiconductor R&D is inherently uncertain, complex, and expensive. Products and technologies under development may fail to meet required performance specifications, encounter unforeseen technical obstacles, or require significantly more time and capital to bring to market than initially projected. Even where R&D efforts are technically successful, resulting products may not achieve commercial viability due to insufficient market demand, unfavorable pricing dynamics, or the emergence of competing technologies that render our solutions less attractive. In addition, the development timelines for advanced semiconductor products can span several years from initial concept to volume production, during which time market requirements and competitive dynamics may shift substantially.

Our R&D pipeline currently includes several programs directed at GaN-on-silicon and GaN-on-SiC device platforms for automotive and industrial applications, next-generation SiC MOSFET architectures with enhanced trench gate structures, and advanced multi-chip module packaging for high-power density applications. There can be no assurance that any of these programs will result in products that achieve market acceptance or generate meaningful revenue. Furthermore, our competitors — including significantly larger semiconductor companies with greater financial and technical resources — are engaged in parallel R&D efforts, and there is no assurance that our development efforts will produce products that are superior to, or even competitive with, those developed by our competitors.

Failure to develop new products or improve existing products in a timely and cost-effective manner could undermine our competitive position and adversely affect our revenue growth and profitability, including our EBITDA margins, which were approximately 28.0% in FY2025 based on EBITDA of approximately €1,069 million on revenue of approximately €3,820 million. If our R&D investments fail to generate adequate returns, our financial condition and results of operations would be materially adversely affected.

3. Rapid technological change in the semiconductor industry could render our products or manufacturing processes obsolete.

The semiconductor industry is characterized by rapid technological change, frequent introductions of new products and design techniques, evolving industry standards, and continual improvements in manufacturing processes. Our competitive position depends on our ability to anticipate these changes and to develop and introduce new and improved products in a timely manner that meet the evolving needs of our customers. Key areas of ongoing technological evolution that are relevant to our business include, but are not limited to:

• transitions to smaller process geometries and higher-density device architectures that enable improved performance, lower power consumption, and reduced die size;

• the development and commercialization of new substrate materials and epitaxial growth techniques for SiC and GaN devices, including larger wafer formats (e.g., 200mm SiC substrates) that could materially reduce per-unit manufacturing costs;

• advances in device packaging technologies, including system-in-package (SiP) solutions, embedded die packaging, and wide-bandgap-specific packaging platforms that improve thermal management and power density;

• the integration of power semiconductor devices with complementary components, such as gate drivers, sensors, and microcontrollers, into intelligent power modules and systems-on-chip; and

• the development of entirely new device architectures, materials systems, or manufacturing paradigms, such as vertical GaN devices, ultra-wide-bandgap materials, or heterogeneous integration approaches.

If we fail to keep pace with these and other technological developments — whether due to insufficient R&D investment, inability to attract and retain skilled engineers, or failure to accurately anticipate the direction of technological change — our existing products and manufacturing processes could become obsolete or less competitive. In such event, we could experience declining revenue, reduced margins, loss of customer relationships, and impairment of our manufacturing assets, any of which could have a material adverse effect on our business, financial condition, and results of operations.

B. Competition. 4. We face intense competition from established semiconductor companies and new market entrants, which could reduce our market share and compress our margins.

The global power semiconductor market is highly competitive and is characterized by the participation of large, diversified semiconductor companies, specialized power semiconductor manufacturers, and an increasing number of new entrants, including well-funded startups and state-sponsored enterprises. Our principal competitors include, among others, major US, European, and Asian semiconductor companies with significantly greater financial, technical, manufacturing, and marketing resources than we possess. These competitors include companies with well-established relationships with the same automotive OEMs, industrial equipment manufacturers, and renewable energy developers that we serve, as well as vertically integrated device manufacturers that may have structural cost advantages.

Increased competition in the power semiconductor market — and in the SiC and GaN segments in particular — could lead to a number of adverse consequences for our business, including:

• price erosion on our existing products as competitors introduce lower-cost alternatives, which could compress our gross margins and EBITDA margins;

• loss of key customer relationships if competitors offer superior products, more favorable commercial terms, or better supply assurance;

• the need for increased R&D and capital expenditure spending in order to maintain competitive parity, which could reduce profitability in the near and medium term;

• reduced ability to attract and retain skilled engineers and other key personnel if competitors offer more attractive compensation packages or career opportunities; and

• competitive disadvantage in securing access to critical raw materials, including SiC substrates, which are in constrained supply and for which certain competitors have established long-term supply agreements or have vertically integrated into substrate manufacturing.

In particular, several of our competitors have announced significant capacity expansion plans for SiC device manufacturing, and the entry of additional participants into the SiC market could lead to overcapacity and downward pricing pressure. If we are unable to compete effectively on the basis of product performance, price, quality, reliability, and customer service, our market share, revenue, and profitability could be materially adversely affected.

C. Cyclicality and Market Conditions

5. The semiconductor industry is cyclical, and a downturn could materially reduce demand for our products and adversely affect our financial results.

The semiconductor industry has historically been subject to significant cyclical fluctuations in supply and demand. These cycles are characterized by periods of rapid growth in demand followed by periods of overcapacity, excess inventory accumulation throughout the supply chain, reduced utilization rates at fabrication facilities, aggressive pricing behavior, and sharp declines in revenue and profitability. The duration and magnitude of these cycles are difficult to predict and are influenced by a wide range of macroeconomic, industry-specific, and end-market factors.

Halcyon's financial performance is sensitive to these industry cycles. Our FY2025 revenue of approximately €3,820 million and EBITDA of approximately €1,069 million reflect current market conditions, which have been supported by strong demand in the electric vehicle, industrial automation, and renewable energy markets. However, there can be no assurance that these favorable conditions will persist. A significant industry downturn could result in:

• reduced customer orders and lower revenue, as customers delay purchasing decisions, reduce inventory levels, or seek to renegotiate pricing;

• margin compression due to lower factory utilization rates, which would spread our fixed manufacturing costs over a smaller revenue base;

• impairment of long-lived assets, including our fabrication equipment and facilities, if anticipated future cash flows decline below carrying values;

• inventory write-downs if products in stock or in production become excess or obsolete due to changes in demand or technology; and

• reduced returns on our significant capital investments.

Our capital expenditure program has been substantial, with expenditures of approximately €680 million in FY2023, €750 million in FY2024, and €820 million in FY2025. In addition, we plan to apply approximately $280,000,000 of the net proceeds from this offering to the construction and equipping of Fab 3 in Dresden. These capital investments are largely irreversible and represent long-term commitments to manufacturing capacity that may not be recoverable in a downturn. If a downturn occurs during or shortly after the ramp-up of Fab 3, we could experience significant underutilization of new capacity, lower returns on invested capital, and adverse effects on our financial condition and results of operations.

6. Reduced demand in the automotive, industrial, or renewable energy sectors could adversely affect our revenue.

A significant portion of our revenue is derived from customers in the automotive, industrial, and renewable energy sectors, each of which is subject to its own cyclical dynamics, regulatory environment, and market conditions. Our exposure to these sectors means that our revenue and profitability are influenced not only by conditions in the semiconductor industry but also by conditions in these end markets.

In the automotive sector, demand for our SiC and GaN power devices is closely linked to the production and sales of electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs). Government policies that promote EV adoption — including purchase subsidies, tax credits, emissions standards, and zero-emission vehicle mandates — have been important drivers of demand for our products. Changes in these policies, including the reduction or elimination of EV incentives, could slow the rate of EV adoption and reduce demand for our automotive power semiconductor products. Similarly, trade disputes, tariffs, or import restrictions that affect the global automotive supply chain could disrupt our customer relationships and reduce order volumes.

In the industrial sector, demand for our products is driven by investment in factory automation, industrial motor drives, power supplies, and other industrial equipment. Industrial capital expenditure cycles are influenced by macroeconomic conditions, including GDP growth, industrial production indices, interest rates, and business confidence. A global or regional economic slowdown could cause industrial customers to defer or cancel capital equipment purchases, reducing demand for our products.

In the renewable energy sector, demand is influenced by government incentive programs (such as investment tax credits and feed-in tariffs), electricity prices, commodity prices, and the pace of renewable energy project development. Changes in energy policy, reductions in renewable energy subsidies, or prolonged periods of low fossil fuel prices could reduce investment in renewable energy infrastructure and the associated demand for our power semiconductor products.

Any significant decline in demand across one or more of these end markets could have a material adverse effect on our revenue, profitability, and growth prospects.

D. Supply Chain and Manufacturing Risks

7. Disruptions in our supply chain, including shortages of raw materials and critical components, could impair our ability to manufacture and deliver products.

The manufacture of SiC and GaN power semiconductor devices requires a range of specialized raw materials and components, including SiC substrates, epitaxial wafers, rare gases (such as argon and nitrogen of semiconductor-grade purity), high-purity chemicals (including photoresists, etchants, and cleaning agents), precious metals used in device metallization, and specialized packaging materials. Many of these materials are sourced from a limited number of qualified suppliers, and in some cases, we depend on single-source suppliers for critical inputs.

The global semiconductor supply chain has demonstrated vulnerability to disruption from range causes, including natural disasters, geopolitical events, pandemics, trade restrictions, transportation and logistics bottlenecks, supplier financial distress, and demand surges that exceed available supply capacity. Any disruption in the supply of critical raw materials or components could delay our production schedules, increase our manufacturing costs, impair our ability to fulfill customer orders on time, and damage our customer relationships.

In particular, the global supply of SiC substrates — a foundational input for our SiC power device manufacturing — remains constrained relative to rapidly growing demand. Although we have entered into long-term supply agreements with our principal substrate suppliers, there can be no assurance that these agreements will be sufficient to meet our future needs, that our suppliers will be able to deliver the contracted volumes on schedule and in specification, or that we will be able to secure additional supply on commercially acceptable terms. If we are unable to obtain adequate supplies of SiC substrates or other critical materials, we may be forced to reduce production volumes, delay new product introductions, or accept higher input costs, any of which could adversely affect our business and financial results.

8. We depend on our manufacturing facilities, and any disruption at our fabrication plants could have a material adverse effect on our operations.

Our manufacturing operations are concentrated in a limited number of fabrication and assembly facilities. Halcyon currently operates the following principal manufacturing and testing facilities:

• Munich, Germany (Headquarters): Our primary fabrication facility (Fab 1), located at our corporate headquarters in Munich, Germany, which produces a broad portfolio of SiC and GaN power semiconductor devices.

• Dresden, Germany (Fab 2 and Fab 3): Fab 2 is operated by our subsidiary Halcyon Power Solutions GmbH and manufactures SiC power modules and discrete devices for automotive and industrial customers. Fab 3 is currently under construction at Königsbrücker Straße 180, 01099 Dresden, Germany, and is expected to significantly expand our SiC manufacturing capacity. We intend to apply approximately $280,000,000 of the net proceeds from this offering to the construction and equipping of Fab 3.

• Brno, Czech Republic: Our subsidiary Halcyon Automotive Components s.r.o. (Technologický park 6, 612 00 Brno, Czech Republic) operates an assembly and testing facility that serves as a key element of our automotive product supply chain.

The construction and commissioning of Fab 3 involves significant execution risk. Construction delays, cost overruns, equipment procurement and installation difficulties, shortages of skilled construction labor, permitting issues (including environmental approvals required under German federal and Saxon state law), and other unforeseen complications could materially delay the planned production ramp-up of Fab 3 and increase the total cost of the project. Any such delays could impair our ability to meet growing customer demand and could adversely affect our competitive position and financial results.

In addition, our existing fabrication and assembly facilities are vulnerable to range potential disruptions, including fire, natural disasters (such as flooding, which has historically affected certain areas of Saxony), equipment failures, power outages, contamination events (including chemical spills and airborne particulate contamination of cleanroom environments), labor disruptions, and acts of terrorism or sabotage. We do not maintain fully redundant fabrication capacity for all of our product lines; accordingly, the loss of production capability at any single facility — even temporarily — could have a disproportionate impact on our ability to manufacture and deliver products, could result in significant financial losses, and could disrupt our relationships with key customers.

Although we maintain property and business interruption insurance, there can be no assurance that such insurance would be sufficient to cover the full extent of losses arising from a major disruption at any of our facilities.

9. Our capital expenditure plans are substantial, and we may not achieve anticipated returns on our investments.

We have invested substantial capital in expanding and upgrading our manufacturing capabilities and infrastructure. Our capital expenditures were approximately €680 million in FY2023, approximately €750 million in FY2024, and approximately €820 million in FY2025. In addition, we plan to apply approximately $280,000,000 of the net proceeds from this offering to the construction and equipping of Fab 3 in Dresden. These investments reflect our strategy of building manufacturing scale and technological capability to support our growth plans and to meet anticipated customer demand for SiC and GaN power semiconductor devices.

However, there can be no assurance that these investments will yield the anticipated benefits, including the planned capacity increases, manufacturing cost efficiencies, and revenue growth that underlie our financial projections. The returns on our capital investments are subject to a number of risks, including:

• deterioration in market conditions that reduces demand for the additional capacity being built, resulting in underutilization of new manufacturing assets;

• technology shifts that reduce the relevance or competitiveness of the manufacturing processes being installed, potentially requiring additional investment to retool or upgrade;

• construction and commissioning risks associated with Fab 3, including delays, cost overruns, and difficulties achieving target yields;

• increases in the cost of raw materials, energy, labor, or equipment that erode the cost efficiencies expected from the expanded capacity; and

• competitive responses by other manufacturers that expand capacity in parallel, potentially leading to industry-wide overcapacity and downward pricing pressure.

If our capital investments fail to generate adequate returns, our financial condition, profitability, and return on invested capital could be materially adversely affected.

E. Customer Concentration and Commercial Risks

10. We may be unable to retain key customers or attract new customers, which could impair our revenue and growth prospects.

Our revenue is derived from a diversified but not unlimited base of customers across the automotive, industrial, and renewable energy sectors. The loss of one or more significant customers, whether due to competitive dynamics, changes in customer sourcing strategies, customer financial difficulties, or other factors, could materially reduce our revenue. In addition, customers may seek to renegotiate existing contracts on terms less favorable to us, including demands for lower pricing, extended payment terms, or more onerous warranty and liability provisions.

In certain cases, our customers may decide to develop internal semiconductor manufacturing capabilities (insourcing) or to qualify alternative suppliers for components currently sourced exclusively from Halcyon. The qualification process for automotive-grade power semiconductors is typically lengthy and rigorous, which provides some degree of customer stickiness; however, once a customer has qualified an alternative supplier, the risk of lost business increases. Furthermore, our ability to attract new customers depends on our continued ability to offer products that meet or exceed the performance, quality, reliability, and cost requirements of potential customers in a timely manner.

If we are unable to retain our existing customer relationships on favorable terms or to attract new customers to replace any lost revenue, our business, financial condition, and results of operations could be materially adversely affected.

11. Our order backlog may not be indicative of future revenue, and customers may cancel or defer orders.

We maintain an order backlog that reflects customer orders for delivery over future periods. However, our order backlog is not a reliable indicator of future revenue for several reasons. Customer orders are typically subject to cancellation, deferral, or modification, and our cancellation policies and contractual arrangements with customers vary. During periods of industry downturn or uncertainty, customers may cancel outstanding orders, defer scheduled deliveries, or reduce order volumes in response to their own demand forecasts and inventory management objectives. Conversely, during periods of supply constraint, customers may place orders that exceed their actual near-term requirements in order to secure allocation, and subsequently cancel or reduce such orders when supply conditions improve.

In addition, certain of our customer contracts contain provisions that allow the customer to adjust order quantities or delivery schedules within specified parameters without penalty. The timing and magnitude of order cancellations or deferrals are difficult to predict and may result in significant quarter-to-quarter fluctuations in our revenue, which could cause our financial results to deviate materially from market expectations.

F. Key Personnel and Human Capital

12. Our success depends on the continued service of key executives and technical personnel, and competition for talent in the semiconductor industry is intense.

Our future success depends in significant part on the continued contributions of our senior management team and key technical personnel, who have deep expertise in wide-bandgap semiconductor technologies, manufacturing operations, and the end markets we serve. Our key executives include:

• Dr. Friedrich Wendt, Chief Executive Officer, age 58, who has served at Halcyon for 22 years and holds a PhD from Technische Universität Dresden. Dr. Wendt has been instrumental in shaping our strategic direction and has extensive relationships with key customers, suppliers, and industry partners.

• Katarina Dalmqvist, Chief Financial Officer, who joined Halcyon in 2019 from Regenhardt Industries and holds an MBA from INSEAD. Ms. Dalmqvist has led our financial strategy, including capital markets activities and cost optimization initiatives.

• Dr. Marcus Helder, Chief Technology Officer and co-founder, who holds a PhD from ETH Glenrock Assurance. Dr. Helder has been a driving force behind our SiC and GaN technology development programs and holds numerous patents related to our core technologies.

• Ingrid Baumann, Chief Operating Officer, who has served at Halcyon for 18 years and oversees our global manufacturing operations, supply chain management, and quality assurance programs.

The loss of any of these executives, or of other key members of our management team and technical staff, could impair our R&D capabilities, disrupt our manufacturing operations, damage our customer relationships, and adversely affect our ability to execute our business strategy. We do not maintain key-person life insurance on any of our executives.

We employ approximately 8,400 people worldwide across our operations in Germany, the United States, Singapore, the People's Republic of China, and the Czech Republic. Competition for skilled engineers and scientists in the semiconductor industry — and in the SiC and GaN technology segments in particular — is global and intense. Semiconductor companies, technology firms, academic institutions, and government research laboratories all compete for a limited pool of qualified talent. We may be unable to attract or retain sufficient numbers of skilled employees, particularly at our Dresden and Munich facilities, where competition for engineering talent is especially acute. If we are unable to maintain our workforce at the levels and skill sets necessary to execute our business plans, our operational capabilities and financial results could be adversely affected.

G. Intellectual Property

13. We may be unable to adequately protect our intellectual property, and third parties may claim that our products infringe their intellectual property rights.

Our business and competitive position depend in significant part on our ability to develop and protect proprietary technologies, including our SiC and GaN device designs, manufacturing processes, circuit topologies, packaging technologies, patents, trade secrets, and accumulated know-how. We rely on a combination of patents, trade secrets, employee and third-party confidentiality agreements, non-compete and non-solicitation agreements, copyright protections, and other contractual and legal measures to protect our intellectual property.

Despite these efforts, we cannot guarantee that our intellectual property will be adequately protected. Unauthorized parties may attempt to copy, reverse-engineer, or otherwise obtain and use our proprietary technology. The legal protections available for intellectual property vary significantly by jurisdiction, and enforcement of intellectual property rights in certain jurisdictions — including the People's Republic of China, where we operate our subsidiary Halcyon Shanghai Semiconductor Co., Ltd. — may be less effective, more uncertain, and more costly than in Germany or the United States. Patent prosecution, maintenance, and enforcement require significant financial and management resources, and there can be no assurance that our issued patents will provide meaningful protection, that our pending patent applications will be granted, or that our patents will not be challenged, narrowed, invalidated, or circumvented by competitors.

In addition, third parties may assert that our products, manufacturing processes, or technologies infringe their intellectual property rights. The semiconductor industry is characterized by frequent patent litigation and extensive cross-licensing arrangements. Intellectual property infringement claims, whether meritorious or not, could result in costly and protracted litigation, the diversion of management attention and resources, the payment of significant damages or royalties, the issuance of injunctions that could prevent us from selling certain products, or the need to redesign products to avoid infringement. Any of these outcomes could have a material adverse effect on our business, financial condition, and results of operations.

H. Indebtedness and Financial Risks

14. We have existing indebtedness, and our ability to service our debt or access additional financing is subject to various risks.

As of the end of the periods indicated, our total outstanding debt was approximately €1,180 million (FY2023), €1,020 million (FY2024), and €890 million (FY2025). Our net debt (total debt less cash and cash equivalents) declined from approximately €660 million as of the end of FY2023 to approximately €150 million as of the end of FY2025, reflecting our efforts to de-lever the balance sheet in advance of this offering.

We intend to use approximately $100,000,000 of the net proceeds from this offering to repay a tranche under our existing revolving credit facility, as more fully described in "Use of Proceeds" elsewhere in this prospectus. Following the application of such proceeds, we will continue to have outstanding indebtedness.

Our existing credit facilities contain financial and operating covenants that, among other things, restrict our ability to incur additional indebtedness, create liens, make certain investments, pay dividends, sell assets, and enter into certain transactions with affiliates. These covenants could limit our operational and strategic flexibility and our ability to respond to changing market conditions. A breach of any such covenant could result in an event of default under the applicable credit agreement, which could permit the lenders to accelerate the maturity of the outstanding debt and, in certain cases, terminate their lending commitments.

Our ability to make scheduled payments on our debt, to refinance our indebtedness, or to fund our planned capital expenditures depends on our future operating performance and cash generation, which are subject to economic, financial, competitive, and other factors beyond our control. If our cash flows and capital resources are insufficient to fund our debt service obligations and other commitments, we could be forced to reduce or delay capital expenditures, sell assets, seek additional equity or debt financing, or restructure our debt, any of which could have a material adverse effect on our business and financial condition. There can be no assurance that future financing will be available to us on favorable terms, or at all.

I. Acquisition and Integration Risks

15. We may pursue acquisitions, joint ventures, or strategic alliances that could be difficult to integrate and may not achieve anticipated benefits.

As part of our growth strategy, we may from time to time pursue acquisitions of complementary businesses, technologies, or product lines, or enter into joint ventures, strategic partnerships, or other collaborative arrangements. Such transactions involve significant risks and uncertainties, including:

• difficulty in identifying suitable acquisition targets or strategic partners on acceptable terms;

• the challenge of integrating acquired businesses, technologies, employees, and operations into our existing organizational structure and corporate culture;

• the diversion of management attention and resources from our core operations during the evaluation, negotiation, and integration of transactions;

• the risk that anticipated synergies, cost savings, revenue enhancements, or other strategic benefits may not be realized, or may be realized more slowly or at greater cost than projected;

• the potential for unforeseen liabilities, contingent obligations, or regulatory issues associated with acquired businesses;

• the risk of impairment of goodwill and other intangible assets recorded in connection with acquisitions; and

• potential disruption of customer, supplier, and employee relationships during transition periods.

If we pursue acquisitions or strategic transactions and are unable to successfully integrate the acquired businesses or realize the anticipated benefits, our business, financial condition, and results of operations could be materially adversely affected.

II. Risks Related to Operations in Multiple Jurisdictions

A. General International Operations

16. We operate in multiple countries and are subject to risks inherent in international operations.

Halcyon conducts business operations across multiple jurisdictions through a network of wholly owned subsidiaries and affiliated entities. Our principal operations are located in:

• Germany: Our corporate headquarters and Fab 1 are located in Munich, Germany. Fab 2 is operated by Halcyon Power Solutions GmbH in Dresden, Germany, and Fab 3 is under construction in Dresden.

• United States: Halcyon Semiconductor USA Inc. (registered address: 1209 Orange Street, Wilmington, DE 19801; principal office: 2500 Augustine Drive, Suite 100, Santa Clara, CA 95054; EIN: 84-3927561) conducts sales, application engineering, and customer support operations.

• Singapore: Halcyon Asia Pacific Pte. Ltd. serves as our Asia-Pacific regional sales and distribution hub.

• People's Republic of China: Halcyon Shanghai Semiconductor Co., Ltd., a wholly foreign-owned enterprise (WFOE), is located at No. 500 Zhangheng Road, Pudong New Area, Shanghai 201203, and operates as a sales and engineering center.

• Czech Republic: Halcyon Automotive Components s.r.o. (Technologický park 6, 612 00 Brno) operates an assembly and testing facility that supports our automotive product line.

Our international operations expose us to range risks that could materially and adversely affect our business, financial condition, and results of operations, including:

• economic instability, recession, or financial crisis in countries where we operate or where our customers are located;

• political instability, changes in government, and shifts in policy direction that create regulatory uncertainty;

• currency exchange rate fluctuations that affect the competitiveness of our pricing, the cost of our operations, and the translation of our financial results;

• trade restrictions, import and export controls, tariffs, sanctions, and embargoes that limit our ability to sell products, procure materials, or transfer technology across borders;

• differing and potentially conflicting legal and regulatory requirements across jurisdictions, including variations in tax law, environmental regulation, labor law, product liability standards, and intellectual property protection;

• difficulties in enforcing contracts, collecting receivables, and protecting intellectual property in jurisdictions with less developed legal systems;

• cultural and language differences that can complicate management oversight, employee relations, and customer interactions; and

• logistical challenges associated with managing geographically dispersed operations, including transportation costs, communication difficulties, and time zone differences.

We cannot guarantee that we will be able to effectively manage these international risks, and any failure to do so could have a material adverse effect on our business and financial results.

B. People's Republic of China

17. Our operations in the People's Republic of China are subject to significant regulatory, geopolitical, and economic risks.

We operate Halcyon Shanghai Semiconductor Co., Ltd. as a wholly foreign-owned enterprise (WFOE) at No. 500 Zhangheng Road, Pudong New Area, Shanghai 201203, People's Republic of China. This entity serves as a sales and engineering center, providing customer support, application engineering, and market development services for our Chinese and broader Asian customer base. The PRC represents a significant and growing market for power semiconductor devices, driven by the country's rapid adoption of electric vehicles, expansion of industrial automation, and investment in renewable energy infrastructure.

However, our operations in the PRC are subject to a range of significant risks, including:

Geopolitical Tensions and Trade Restrictions. Relations between the United States and the People's Republic of China have been characterized by increasing tension in recent years, particularly with respect to technology competition and national security concerns. The US government has imposed, and may continue to expand, restrictions on the export of advanced semiconductor technology and equipment to China, including through the Bureau of Industry and Security's Entity List designations, end-use controls, and foreign direct product rules under the Export Administration Regulations (EAR). Similar restrictions may be adopted by the European Union or other jurisdictions. These restrictions could limit our ability to sell certain products to Chinese customers, to transfer technology to our Shanghai operations, or to collaborate with Chinese partners on R&D activities. Retaliatory measures by the PRC government, including restrictions on the supply of critical raw materials, could also adversely affect our business.

Evolving Regulatory Environment. The PRC regulatory environment for foreign-invested enterprises in the technology sector is complex and subject to rapid change. New regulations governing foreign investment, national security reviews, data localization, cybersecurity, and technology transfer could increase our compliance costs, limit our operational flexibility, or require changes to our business model in China.

Data Privacy and Cross-Border Data Transfers. PRC data protection laws, including the Personal Information Protection Law (PIPL) and the Data Security Law (DSL), impose significant requirements on the collection, processing, storage, and cross-border transfer of personal information and important data. Compliance with these laws may require us to localize certain data in China, implement additional security measures, and undergo government-mandated security assessments for cross-border data transfers. These requirements could increase our compliance costs, restrict the flow of information within our global organization, and expose us to significant penalties for non-compliance.

Pressure to Localize. We may face pressure from the PRC government or from Chinese customers to localize manufacturing operations in China, to form joint ventures with Chinese partners, or to share proprietary technology as a condition of continued market access. Acceding to such pressure could erode our competitive advantage, expose our intellectual property to misappropriation, and conflict with the interests of our shareholders.

Economic Uncertainty. The PRC economy has experienced periods of significant volatility, and the government's economic policies, including fiscal stimulus measures, monetary policy decisions, and regulatory actions affecting specific industries, can have a material impact on business conditions. A slowdown in the Chinese economy or a disruption in the Chinese financial system could reduce demand for our products in China and adversely affect our financial results.

C. Germany. 18. As a company headquartered in Germany, we are subject to German corporate, tax, employment, and data protection laws that differ from US laws and may impose additional burdens.

Halcyon Semiconductor Aktiengesellschaft is an Aktiengesellschaft (AG) incorporated and registered in Munich, Bavaria, Federal Republic of Germany, and is recorded in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Munich under HRB 217458. As a German AG, we are subject to the corporate, tax, employment, data protection, and environmental laws and regulations of the Federal Republic of Germany, which differ in significant respects from the laws and regulations applicable to companies organized in the United States.

Two-Tier Governance and Co-Determination. German corporate governance law requires an AG to maintain a two-tier board structure consisting of a management board (Vorstand) responsible for the day-to-day management of the company and a supervisory board (Aufsichtsrat) that appoints and oversees the management board. Under the German Co-Determination Act (Mitbestimmungsgesetz), companies with more than 2,000 employees in Germany are required to have a supervisory board composed of equal numbers of shareholder representatives and employee representatives. These requirements may limit our flexibility in certain corporate decisions, including executive appointments, compensation arrangements, and strategic transactions, relative to companies governed by the laws of US states.

Data Protection. As a German company, we are subject to the General Data Protection Regulation (GDPR) (Regulation (EU) 2016/679), as supplemented by the German Federal Data Protection Act (Bundesdatenschutzgesetz, BDSG). GDPR imposes strict requirements on the processing of personal data, including requirements related to lawful bases for processing, data minimization, data subject rights, data breach notification, and cross-border data transfers. Non-compliance with GDPR can result in administrative fines of up to the greater of €20 million or 4% of annual worldwide turnover, as well as claims for damages by affected data subjects.

Tax, Labor, and Environmental Law. Changes in German tax law — including changes to corporate income tax (Körperschaftsteuer), trade tax (Gewerbesteuer), withholding tax (Kapitalertragsteuer), or value-added tax (Umsatzsteuer) — could increase our tax burden and reduce our after-tax profitability. German labor law provides employees with extensive protections, including works council rights (Betriebsrat), limitations on dismissals, and mandated employee benefits, which could increase our labor costs and limit our operational flexibility. Changes in German environmental regulations, including regulations implementing EU directives on emissions, waste management, and chemical safety, could increase our manufacturing costs and require additional capital investment.

D. United States

19. We face risks related to our US operations and our planned US listing.

Halcyon Semiconductor USA Inc., our wholly owned US subsidiary (registered address: 1209 Orange Street, Wilmington, DE 19801; principal office: 2500 Augustine Drive, Suite 100, Santa Clara, CA 95054; EIN: 84-3927561), conducts sales, application engineering, and customer support activities in the United States. In connection with this offering, we are listing our ADSs on the Nasdaq Global Select Market, which will significantly increase our exposure to US laws and regulations and our interaction with US investors, regulators, and market participants.

As a company with US operations and a US public listing, we are or will be subject to a broad range of US federal, state, and local laws and regulations, including US federal securities laws (Securities Act, Exchange Act, Sarbanes-Oxley Act), Nasdaq listing standards, US federal and state tax laws, export control and sanctions regulations (EAR, ITAR, OFAC), anti-corruption laws (FCPA), employment and labor laws, product liability laws, and environmental regulations. Compliance with this complex and evolving regulatory landscape will require significant ongoing investment in legal, compliance, and administrative resources, and will increase our operating costs.

Furthermore, our US operations expose us to the risk of litigation in US courts, including securities class action lawsuits, shareholder derivative suits, intellectual property disputes, product liability claims, and employment-related claims. Litigation in the United States can be extremely costly and time-consuming, and adverse outcomes could result in substantial monetary damages, injunctive relief, or other remedies that could materially harm our business and financial condition.

E. Currency Risk

20. We are exposed to foreign currency exchange rate fluctuations, particularly between the euro and the US dollar, which could adversely affect our reported financial results.

Halcyon reports its consolidated financial statements in euros in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). However, a meaningful portion of our revenue and expenses is denominated in currencies other than the euro, including the US dollar (through our US subsidiary, Halcyon Semiconductor USA Inc.), the Singapore dollar (through Halcyon Asia Pacific Pte. Ltd.), the Chinese renminbi (through Halcyon Shanghai Semiconductor Co., Ltd.), and the Czech koruna (through Halcyon Automotive Components s.r.o.).

Fluctuations in foreign currency exchange rates — and in particular, fluctuations in the euro/US dollar exchange rate — can have a significant impact on our reported financial results. As of January 10, 2026, the assumed EUR/USD exchange rate used for purposes of this prospectus is €1.00 = $1.078. Movements in this exchange rate affect both our reported revenue and expenses (through the translation of non-euro-denominated financial results into euros) and the US dollar value of our ADSs and any distributions thereon.

We engage in hedging activities from time to time in order to manage our exposure to foreign currency exchange rate fluctuations. However, we may not be able to effectively hedge all of our currency exposures, and the hedging instruments we use may introduce additional costs, require the posting of collateral, and expose us to counterparty credit risk. Furthermore, hedging strategies can be complex and may not perform as intended in all market conditions. To the extent that our hedging activities are ineffective or insufficient, fluctuations in exchange rates could materially adversely affect our financial results and the trading price of our ADSs.

In addition, because our ADSs are denominated in US dollars and our ordinary shares are denominated in euros, movements in the EUR/USD exchange rate will affect the US dollar value of the economic interest represented by each ADS, independently of changes in our underlying business performance. Investors purchasing our ADSs in US dollars should be aware that currency risk is an inherent component of their investment.

III. Risks Related to the ADSs and This Offering

A. Market and Liquidity Risks

21. There has been no prior public market for our ADSs in the United States, and an active trading market may not develop or be sustained.

Although our ordinary shares are listed on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) in the Prime Standard segment under the ticker symbol FRA: HCY, our American Depositary Shares have not previously been publicly traded in the United States. We intend to list our ADSs on the Nasdaq Global Select Market under the ticker symbol "HCYN" in connection with this offering, but there can be no assurance that an active, liquid trading market for our ADSs will develop or, if it develops, that such market will be sustained.

The public offering price of our ADSs (proposed range: $39.00 to $45.00 per ADS) was determined through negotiations between us, the selling shareholders, and the underwriters, and reflects a number of factors, including our historical and projected financial results, the trading price of our ordinary shares on the Frankfurt Stock Exchange, conditions in the US and global capital markets, prevailing market valuations of comparable publicly traded semiconductor companies, and the results of our marketing and bookbuilding process. The public offering price may not be indicative of the market price for our ADSs after this offering. The trading price of our ADSs may decline below the public offering price, and you may not be able to sell your ADSs at or above the price you paid.

Several factors may inhibit the development of an active and liquid trading market for our ADSs, including limited analyst research coverage, the relatively small size of our US public float compared to larger US-listed semiconductor companies, and the availability of our ordinary shares as an alternative investment on the Frankfurt Stock Exchange. If an active trading market for our ADSs does not develop or is not sustained, the liquidity of your investment and your ability to sell your ADSs at an acceptable price could be materially and adversely affected.

22. The market price of our ADSs may be volatile and could decline significantly.

The trading price of our ADSs may fluctuate significantly from time to time and may decline substantially from the initial public offering price. Factors that could cause significant fluctuations in the price of our ADSs include, but are not limited to:

• quarterly variations in our revenue, earnings, or other key operating metrics, or the failure to meet market expectations established by securities analysts or investors;

• changes in financial estimates, investment recommendations, or target prices published by securities analysts who follow our company, or the initiation or termination of analyst coverage;

• announcements by us or our competitors of new products, technological breakthroughs, strategic transactions, significant contracts, or other material developments;

• broader trends and conditions in the semiconductor industry, including cyclical fluctuations in supply and demand, capacity utilization rates, and average selling prices;

• macroeconomic and geopolitical events, including changes in interest rates, inflation, trade policy, sanctions, armed conflicts, and pandemics;

• fluctuations in the euro/US dollar exchange rate, which affect the US dollar value of the economic interest represented by our ADSs;

• changes in the market valuations of comparable publicly traded semiconductor companies;

• sales or purchases of significant amounts of our ADSs or ordinary shares by major shareholders, officers, directors, or institutional investors;

• changes in applicable laws and regulations, including export controls, tax laws, and environmental regulations, that could affect our business or the semiconductor industry generally; and

• general conditions in the US and global equity markets, including changes in investor risk appetite and sector rotation trends.

Our market capitalization as of January 10, 2026 was approximately €8.6 billion, based on approximately 215,000,000 outstanding ordinary shares on the Frankfurt Stock Exchange. Upon completion of this offering, we will have approximately 245,000,000 shares outstanding (including the 30,000,000 new ordinary shares issued in this offering), plus any shares that may be issued upon exercise of the underwriters' overallotment option. The US ADS trading market may exhibit different liquidity characteristics and volatility patterns than the Frankfurt ordinary share market, and investors should be aware that past trading performance on the Frankfurt Stock Exchange may not be indicative of future performance of the ADSs on Nasdaq.

In recent years, the stock market has experienced significant price and volume fluctuations that have often been unrelated to the operating performance of the affected companies. These broad market fluctuations may adversely affect the trading price of our ADSs. In addition, securities class action litigation has often been instituted against companies following periods of volatility in the market price of their securities. If we were subject to such litigation, it could result in substantial costs, divert management attention, and harm our reputation, regardless of the outcome.

23. Sales of substantial amounts of our ADSs or ordinary shares in the public market, or the perception that such sales may occur, could cause the price of our ADSs to decline.

After the completion of this offering, a substantial number of our ordinary shares and ADSs will be held by shareholders who may seek to sell their positions in the public market. Sales of substantial amounts of our ADSs or ordinary shares in the public market, or the perception by the market that such sales may occur, could cause the trading price of our ADSs to decline significantly.

Following the offering, our principal shareholders will hold the following approximate positions:

• Rheintal Industrieholding GmbH (the Wendt family holding company, controlled by Margarethe Wendt, Managing Director, Königsallee 60, 40212 Düsseldorf): approximately 39,445,000 ordinary shares, representing approximately 16.1% of post-offering outstanding shares.

• Kestrel Capital Partners AG: approximately 16,555,000 ordinary shares, representing approximately 6.8% of post-offering outstanding shares.

• Halcyon Employee Stock Ownership Trust (ESOT): 6,665,000 shares, representing approximately 3.1% of pre-IPO outstanding shares.

In connection with this offering, we, the selling shareholders (Rheintal Industrieholding GmbH and Kestrel Capital Partners AG), and our officers and directors have agreed to lock-up restrictions that prohibit the offer, sale, or other transfer of our ordinary shares or ADSs (or securities convertible into or exchangeable for ordinary shares or ADSs) for a period of 180 days after the date of pricing of this offering. Based on a target pricing date of July 1, 2026, the lock-up period is expected to expire on December 28, 2026. Westbridge Securities LLC, in its capacity as lock-up agent, may waive the lock-up restrictions at any time, in its sole discretion, with respect to any or all of the locked-up securities.

Upon expiration of the lock-up period (or upon any earlier waiver by Westbridge Securities LLC), a substantial number of shares will become eligible for sale in the public market, including the shares retained by Rheintal (approximately 39,445,000 shares), Kestrel (approximately 16,555,000 shares), shares held by the ESOT, and shares held by our officers and directors, subject to applicable securities law restrictions, including volume limitations under Rule 144 of the Securities Act (to the extent applicable). The sale of a significant number of these shares — or the market's perception that such sales are likely to occur — could exert substantial downward pressure on the trading price of our ADSs.

In addition, the underwriters have been granted an overallotment option to purchase up to 3,210,000 additional ADSs (representing 6,420,000 additional ordinary shares), equal to 15% of the base deal of 21,400,000 ADSs, at the public offering price less the underwriting discount. Exercise of this option would result in the issuance of additional ADSs and could have a dilutive effect on existing holders. Furthermore, we may in the future issue additional ordinary shares or securities conve

DRAFT — PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT
RISK FACTORS
Calderwood & Harkness LLP — Working Draft — March 9, 2026 Prepared by: Claire Dempsey (Lead Associate), Audrey Zhou (Working Associate) Responsible Partner: Vivienne St. Claire Matter No.: 1032-00003 Subject to review by Halcyon Semiconductor AG, Bähr Stein Rechtsanwälte, and Varen & Kessler LLP (underwriters' counsel)
Investing in our ADSs involves a high degree of risk. You should carefully consider the following risk factors, together with all of the other information contained in this prospectus, including our consolidated financial statements and related notes thereto appearing elsewhere in this prospectus, before deciding to invest in our ADSs. Any of the following risks could have a material adverse effect on our business, financial condition, results of operations, and prospects. In such case, the trading price of our ADSs could decline and you may lose all or part of your investment.
The risks described below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition, results of operations, and prospects. In any such case, the trading price of our ADSs could decline, and you could lose all or part of your investment. You should also read and consider the information set forth in the sections of this prospectus entitled "Cautionary Statement Regarding Forward-Looking Statements," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and our consolidated financial statements and related notes included elsewhere in this prospectus.
In this prospectus, references to "Halcyon," the "Company," "we," "us," and "our" refer to Halcyon Semiconductor Aktiengesellschaft (an Aktiengesellschaft organized under the laws of the Federal Republic of Germany) and, unless the context otherwise requires, its consolidated subsidiaries. Each American Depositary Share, or ADS, represents two ordinary shares (Stammaktien) of Halcyon. Our ADSs are to be listed on the Nasdaq Global Select Market under the ticker symbol "HCYN."
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I. Risks Related to Halcyon's Business and the Semiconductor Industry
A. Technology and Product Risks
1. Our future growth depends on the continued adoption of silicon carbide (SiC) and gallium nitride (GaN) power semiconductor technologies, which may not occur at the rate we anticipate or at all.
Halcyon designs and manufactures advanced power semiconductor devices based on silicon carbide (SiC) and gallium nitride (GaN) wide-bandgap semiconductor technologies. Our products serve critical applications across the automotive, industrial, and renewable energy sectors, including electric vehicle powertrains, onboard chargers, industrial motor drives, solar inverters, and wind turbine power conversion systems. Our business strategy and long-term financial projections are premised on the expectation that adoption of wide-bandgap semiconductor technologies will continue to accelerate in these end markets over the next several years.
However, market adoption of SiC and GaN power semiconductor technologies remains subject to considerable uncertainty. Although these technologies offer significant theoretical advantages over traditional silicon-based power devices — including higher efficiency, greater power density, and superior thermal performance — the ultimate pace and extent of their commercial adoption depend on a wide range of factors, many of which are beyond our control. These factors include, among others:
• the relative cost-effectiveness of SiC and GaN devices compared to traditional silicon-based alternatives, including insulated gate bipolar transistors (IGBTs) and silicon metal-oxide-semiconductor field-effect transistors (MOSFETs), particularly as silicon device manufacturers continue to improve performance and reduce costs;
• the development and commercial viability of competing wide-bandgap materials, such as diamond, aluminum nitride, and gallium oxide, which could provide superior performance characteristics in certain applications and divert demand away from SiC and GaN solutions;
• the pace of adoption of electric vehicles by consumers and fleet operators, which is influenced by government subsidies and incentive programs, charging infrastructure availability, battery cost and range improvements, and consumer preferences;
• capital investment decisions by industrial equipment manufacturers and renewable energy developers, which are sensitive to macroeconomic conditions, interest rates, commodity prices, and regulatory policy; and
• the availability of adequately trained design engineers at our customers' organizations who are capable of integrating SiC and GaN devices into end-product designs, as the transition from silicon-based designs requires meaningful engineering effort and organizational commitment.
If automotive original equipment manufacturers (OEMs), Tier 1 suppliers, industrial customers, or renewable energy producers delay or reduce their adoption of SiC- and GaN-based power semiconductor solutions for any of these reasons or others, our revenue growth projections could be materially impaired. Our financial projections contemplate a revenue compound annual growth rate (CAGR) of approximately 9.0% between FY2023 and FY2025, from approximately €3,214 million to approximately €3,820 million. These projections are predicated on continued expansion of the addressable market for wide-bandgap semiconductors. If the market for SiC and GaN devices grows more slowly than we anticipate, or if our competitors capture a disproportionate share of market growth, our revenue, profitability, and long-term growth prospects could be materially adversely affected.
2. Our research and development investments may not result in commercially viable products or technologies.
We invest significant resources in research and development (R&D) in order to develop next-generation power semiconductor technologies, improve the performance and cost-effectiveness of our existing products, and maintain our competitive position in the rapidly evolving semiconductor industry. We intend to allocate approximately $140,000,000 of the net proceeds from this offering to R&D activities focused on next-generation GaN power devices and advanced packaging technologies, as more fully described in "Use of Proceeds" elsewhere in this prospectus.
Semiconductor R&D is inherently uncertain, complex, and expensive. Products and technologies under development may fail to meet required performance specifications, encounter unforeseen technical obstacles, or require significantly more time and capital to bring to market than initially projected. Even where R&D efforts are technically successful, resulting products may not achieve commercial viability due to insufficient market demand, unfavorable pricing dynamics, or the emergence of competing technologies that render our solutions less attractive. In addition, the development timelines for advanced semiconductor products can span several years from initial concept to volume production, during which time market requirements and competitive dynamics may shift substantially.
Our R&D pipeline currently includes several programs directed at GaN-on-silicon and GaN-on-SiC device platforms for automotive and industrial applications, next-generation SiC MOSFET architectures with enhanced trench gate structures, and advanced multi-chip module packaging for high-power density applications. There can be no assurance that any of these programs will result in products that achieve market acceptance or generate meaningful revenue. Furthermore, our competitors — including significantly larger semiconductor companies with greater financial and technical resources — are engaged in parallel R&D efforts, and there is no assurance that our development efforts will produce products that are superior to, or even competitive with, those developed by our competitors.
Failure to develop new products or improve existing products in a timely and cost-effective manner could undermine our competitive position and adversely affect our revenue growth and profitability, including our EBITDA margins, which were approximately 28.0% in FY2025 based on EBITDA of approximately €1,069 million on revenue of approximately €3,820 million. If our R&D investments fail to generate adequate returns, our financial condition and results of operations would be materially adversely affected.
3. Rapid technological change in the semiconductor industry could render our products or manufacturing processes obsolete.
The semiconductor industry is characterized by rapid technological change, frequent introductions of new products and design techniques, evolving industry standards, and continual improvements in manufacturing processes. Our competitive position depends on our ability to anticipate these changes and to develop and introduce new and improved products in a timely manner that meet the evolving needs of our customers. Key areas of ongoing technological evolution that are relevant to our business include, but are not limited to:
• transitions to smaller process geometries and higher-density device architectures that enable improved performance, lower power consumption, and reduced die size;
• the development and commercialization of new substrate materials and epitaxial growth techniques for SiC and GaN devices, including larger wafer formats (e.g., 200mm SiC substrates) that could materially reduce per-unit manufacturing costs;
• advances in device packaging technologies, including system-in-package (SiP) solutions, embedded die packaging, and wide-bandgap-specific packaging platforms that improve thermal management and power density;
• the integration of power semiconductor devices with complementary components, such as gate drivers, sensors, and microcontrollers, into intelligent power modules and systems-on-chip; and
• the development of entirely new device architectures, materials systems, or manufacturing paradigms, such as vertical GaN devices, ultra-wide-bandgap materials, or heterogeneous integration approaches.
If we fail to keep pace with these and other technological developments — whether due to insufficient R&D investment, inability to attract and retain skilled engineers, or failure to accurately anticipate the direction of technological change — our existing products and manufacturing processes could become obsolete or less competitive. In such event, we could experience declining revenue, reduced margins, loss of customer relationships, and impairment of our manufacturing assets, any of which could have a material adverse effect on our business, financial condition, and results of operations.
B. Competition. 4. We face intense competition from established semiconductor companies and new market entrants, which could reduce our market share and compress our margins.
The global power semiconductor market is highly competitive and is characterized by the participation of large, diversified semiconductor companies, specialized power semiconductor manufacturers, and an increasing number of new entrants, including well-funded startups and state-sponsored enterprises. Our principal competitors include, among others, major US, European, and Asian semiconductor companies with significantly greater financial, technical, manufacturing, and marketing resources than we possess. These competitors include companies with well-established relationships with the same automotive OEMs, industrial equipment manufacturers, and renewable energy developers that we serve, as well as vertically integrated device manufacturers that may have structural cost advantages.
Increased competition in the power semiconductor market — and in the SiC and GaN segments in particular — could lead to a number of adverse consequences for our business, including:
• price erosion on our existing products as competitors introduce lower-cost alternatives, which could compress our gross margins and EBITDA margins;
• loss of key customer relationships if competitors offer superior products, more favorable commercial terms, or better supply assurance;
• the need for increased R&D and capital expenditure spending in order to maintain competitive parity, which could reduce profitability in the near and medium term;
• reduced ability to attract and retain skilled engineers and other key personnel if competitors offer more attractive compensation packages or career opportunities; and
• competitive disadvantage in securing access to critical raw materials, including SiC substrates, which are in constrained supply and for which certain competitors have established long-term supply agreements or have vertically integrated into substrate manufacturing.
In particular, several of our competitors have announced significant capacity expansion plans for SiC device manufacturing, and the entry of additional participants into the SiC market could lead to overcapacity and downward pricing pressure. If we are unable to compete effectively on the basis of product performance, price, quality, reliability, and customer service, our market share, revenue, and profitability could be materially adversely affected.
C. Cyclicality and Market Conditions
5. The semiconductor industry is cyclical, and a downturn could materially reduce demand for our products and adversely affect our financial results.
The semiconductor industry has historically been subject to significant cyclical fluctuations in supply and demand. These cycles are characterized by periods of rapid growth in demand followed by periods of overcapacity, excess inventory accumulation throughout the supply chain, reduced utilization rates at fabrication facilities, aggressive pricing behavior, and sharp declines in revenue and profitability. The duration and magnitude of these cycles are difficult to predict and are influenced by a wide range of macroeconomic, industry-specific, and end-market factors.
Halcyon's financial performance is sensitive to these industry cycles. Our FY2025 revenue of approximately €3,820 million and EBITDA of approximately €1,069 million reflect current market conditions, which have been supported by strong demand in the electric vehicle, industrial automation, and renewable energy markets. However, there can be no assurance that these favorable conditions will persist. A significant industry downturn could result in:
• reduced customer orders and lower revenue, as customers delay purchasing decisions, reduce inventory levels, or seek to renegotiate pricing;
• margin compression due to lower factory utilization rates, which would spread our fixed manufacturing costs over a smaller revenue base;
• impairment of long-lived assets, including our fabrication equipment and facilities, if anticipated future cash flows decline below carrying values;
• inventory write-downs if products in stock or in production become excess or obsolete due to changes in demand or technology; and
• reduced returns on our significant capital investments.
Our capital expenditure program has been substantial, with expenditures of approximately €680 million in FY2023, €750 million in FY2024, and €820 million in FY2025. In addition, we plan to apply approximately $280,000,000 of the net proceeds from this offering to the construction and equipping of Fab 3 in Dresden. These capital investments are largely irreversible and represent long-term commitments to manufacturing capacity that may not be recoverable in a downturn. If a downturn occurs during or shortly after the ramp-up of Fab 3, we could experience significant underutilization of new capacity, lower returns on invested capital, and adverse effects on our financial condition and results of operations.
6. Reduced demand in the automotive, industrial, or renewable energy sectors could adversely affect our revenue.
A significant portion of our revenue is derived from customers in the automotive, industrial, and renewable energy sectors, each of which is subject to its own cyclical dynamics, regulatory environment, and market conditions. Our exposure to these sectors means that our revenue and profitability are influenced not only by conditions in the semiconductor industry but also by conditions in these end markets.
In the automotive sector, demand for our SiC and GaN power devices is closely linked to the production and sales of electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs). Government policies that promote EV adoption — including purchase subsidies, tax credits, emissions standards, and zero-emission vehicle mandates — have been important drivers of demand for our products. Changes in these policies, including the reduction or elimination of EV incentives, could slow the rate of EV adoption and reduce demand for our automotive power semiconductor products. Similarly, trade disputes, tariffs, or import restrictions that affect the global automotive supply chain could disrupt our customer relationships and reduce order volumes.
In the industrial sector, demand for our products is driven by investment in factory automation, industrial motor drives, power supplies, and other industrial equipment. Industrial capital expenditure cycles are influenced by macroeconomic conditions, including GDP growth, industrial production indices, interest rates, and business confidence. A global or regional economic slowdown could cause industrial customers to defer or cancel capital equipment purchases, reducing demand for our products.
In the renewable energy sector, demand is influenced by government incentive programs (such as investment tax credits and feed-in tariffs), electricity prices, commodity prices, and the pace of renewable energy project development. Changes in energy policy, reductions in renewable energy subsidies, or prolonged periods of low fossil fuel prices could reduce investment in renewable energy infrastructure and the associated demand for our power semiconductor products.
Any significant decline in demand across one or more of these end markets could have a material adverse effect on our revenue, profitability, and growth prospects.
D. Supply Chain and Manufacturing Risks
7. Disruptions in our supply chain, including shortages of raw materials and critical components, could impair our ability to manufacture and deliver products.
The manufacture of SiC and GaN power semiconductor devices requires a range of specialized raw materials and components, including SiC substrates, epitaxial wafers, rare gases (such as argon and nitrogen of semiconductor-grade purity), high-purity chemicals (including photoresists, etchants, and cleaning agents), precious metals used in device metallization, and specialized packaging materials. Many of these materials are sourced from a limited number of qualified suppliers, and in some cases, we depend on single-source suppliers for critical inputs.
The global semiconductor supply chain has demonstrated vulnerability to disruption from range causes, including natural disasters, geopolitical events, pandemics, trade restrictions, transportation and logistics bottlenecks, supplier financial distress, and demand surges that exceed available supply capacity. Any disruption in the supply of critical raw materials or components could delay our production schedules, increase our manufacturing costs, impair our ability to fulfill customer orders on time, and damage our customer relationships.
In particular, the global supply of SiC substrates — a foundational input for our SiC power device manufacturing — remains constrained relative to rapidly growing demand. Although we have entered into long-term supply agreements with our principal substrate suppliers, there can be no assurance that these agreements will be sufficient to meet our future needs, that our suppliers will be able to deliver the contracted volumes on schedule and in specification, or that we will be able to secure additional supply on commercially acceptable terms. If we are unable to obtain adequate supplies of SiC substrates or other critical materials, we may be forced to reduce production volumes, delay new product introductions, or accept higher input costs, any of which could adversely affect our business and financial results.
8. We depend on our manufacturing facilities, and any disruption at our fabrication plants could have a material adverse effect on our operations.
Our manufacturing operations are concentrated in a limited number of fabrication and assembly facilities. Halcyon currently operates the following principal manufacturing and testing facilities:
• Munich, Germany (Headquarters): Our primary fabrication facility (Fab 1), located at our corporate headquarters in Munich, Germany, which produces a broad portfolio of SiC and GaN power semiconductor devices.
• Dresden, Germany (Fab 2 and Fab 3): Fab 2 is operated by our subsidiary Halcyon Power Solutions GmbH and manufactures SiC power modules and discrete devices for automotive and industrial customers. Fab 3 is currently under construction at Königsbrücker Straße 180, 01099 Dresden, Germany, and is expected to significantly expand our SiC manufacturing capacity. We intend to apply approximately $280,000,000 of the net proceeds from this offering to the construction and equipping of Fab 3.
• Brno, Czech Republic: Our subsidiary Halcyon Automotive Components s.r.o. (Technologický park 6, 612 00 Brno, Czech Republic) operates an assembly and testing facility that serves as a key element of our automotive product supply chain.
The construction and commissioning of Fab 3 involves significant execution risk. Construction delays, cost overruns, equipment procurement and installation difficulties, shortages of skilled construction labor, permitting issues (including environmental approvals required under German federal and Saxon state law), and other unforeseen complications could materially delay the planned production ramp-up of Fab 3 and increase the total cost of the project. Any such delays could impair our ability to meet growing customer demand and could adversely affect our competitive position and financial results.
In addition, our existing fabrication and assembly facilities are vulnerable to range potential disruptions, including fire, natural disasters (such as flooding, which has historically affected certain areas of Saxony), equipment failures, power outages, contamination events (including chemical spills and airborne particulate contamination of cleanroom environments), labor disruptions, and acts of terrorism or sabotage. We do not maintain fully redundant fabrication capacity for all of our product lines; accordingly, the loss of production capability at any single facility — even temporarily — could have a disproportionate impact on our ability to manufacture and deliver products, could result in significant financial losses, and could disrupt our relationships with key customers.
Although we maintain property and business interruption insurance, there can be no assurance that such insurance would be sufficient to cover the full extent of losses arising from a major disruption at any of our facilities.
9. Our capital expenditure plans are substantial, and we may not achieve anticipated returns on our investments.
We have invested substantial capital in expanding and upgrading our manufacturing capabilities and infrastructure. Our capital expenditures were approximately €680 million in FY2023, approximately €750 million in FY2024, and approximately €820 million in FY2025. In addition, we plan to apply approximately $280,000,000 of the net proceeds from this offering to the construction and equipping of Fab 3 in Dresden. These investments reflect our strategy of building manufacturing scale and technological capability to support our growth plans and to meet anticipated customer demand for SiC and GaN power semiconductor devices.
However, there can be no assurance that these investments will yield the anticipated benefits, including the planned capacity increases, manufacturing cost efficiencies, and revenue growth that underlie our financial projections. The returns on our capital investments are subject to a number of risks, including:
• deterioration in market conditions that reduces demand for the additional capacity being built, resulting in underutilization of new manufacturing assets;
• technology shifts that reduce the relevance or competitiveness of the manufacturing processes being installed, potentially requiring additional investment to retool or upgrade;
• construction and commissioning risks associated with Fab 3, including delays, cost overruns, and difficulties achieving target yields;
• increases in the cost of raw materials, energy, labor, or equipment that erode the cost efficiencies expected from the expanded capacity; and
• competitive responses by other manufacturers that expand capacity in parallel, potentially leading to industry-wide overcapacity and downward pricing pressure.
If our capital investments fail to generate adequate returns, our financial condition, profitability, and return on invested capital could be materially adversely affected.
E. Customer Concentration and Commercial Risks
10. We may be unable to retain key customers or attract new customers, which could impair our revenue and growth prospects.
Our revenue is derived from a diversified but not unlimited base of customers across the automotive, industrial, and renewable energy sectors. The loss of one or more significant customers, whether due to competitive dynamics, changes in customer sourcing strategies, customer financial difficulties, or other factors, could materially reduce our revenue. In addition, customers may seek to renegotiate existing contracts on terms less favorable to us, including demands for lower pricing, extended payment terms, or more onerous warranty and liability provisions.
In certain cases, our customers may decide to develop internal semiconductor manufacturing capabilities (insourcing) or to qualify alternative suppliers for components currently sourced exclusively from Halcyon. The qualification process for automotive-grade power semiconductors is typically lengthy and rigorous, which provides some degree of customer stickiness; however, once a customer has qualified an alternative supplier, the risk of lost business increases. Furthermore, our ability to attract new customers depends on our continued ability to offer products that meet or exceed the performance, quality, reliability, and cost requirements of potential customers in a timely manner.
If we are unable to retain our existing customer relationships on favorable terms or to attract new customers to replace any lost revenue, our business, financial condition, and results of operations could be materially adversely affected.
11. Our order backlog may not be indicative of future revenue, and customers may cancel or defer orders.
We maintain an order backlog that reflects customer orders for delivery over future periods. However, our order backlog is not a reliable indicator of future revenue for several reasons. Customer orders are typically subject to cancellation, deferral, or modification, and our cancellation policies and contractual arrangements with customers vary. During periods of industry downturn or uncertainty, customers may cancel outstanding orders, defer scheduled deliveries, or reduce order volumes in response to their own demand forecasts and inventory management objectives. Conversely, during periods of supply constraint, customers may place orders that exceed their actual near-term requirements in order to secure allocation, and subsequently cancel or reduce such orders when supply conditions improve.
In addition, certain of our customer contracts contain provisions that allow the customer to adjust order quantities or delivery schedules within specified parameters without penalty. The timing and magnitude of order cancellations or deferrals are difficult to predict and may result in significant quarter-to-quarter fluctuations in our revenue, which could cause our financial results to deviate materially from market expectations.
F. Key Personnel and Human Capital
12. Our success depends on the continued service of key executives and technical personnel, and competition for talent in the semiconductor industry is intense.
Our future success depends in significant part on the continued contributions of our senior management team and key technical personnel, who have deep expertise in wide-bandgap semiconductor technologies, manufacturing operations, and the end markets we serve. Our key executives include:
• Dr. Friedrich Wendt, Chief Executive Officer, age 58, who has served at Halcyon for 22 years and holds a PhD from Technische Universität Dresden. Dr. Wendt has been instrumental in shaping our strategic direction and has extensive relationships with key customers, suppliers, and industry partners.
• Katarina Dalmqvist, Chief Financial Officer, who joined Halcyon in 2019 from Regenhardt Industries and holds an MBA from INSEAD. Ms. Dalmqvist has led our financial strategy, including capital markets activities and cost optimization initiatives.
• Dr. Marcus Helder, Chief Technology Officer and co-founder, who holds a PhD from ETH Glenrock Assurance. Dr. Helder has been a driving force behind our SiC and GaN technology development programs and holds numerous patents related to our core technologies.
• Ingrid Baumann, Chief Operating Officer, who has served at Halcyon for 18 years and oversees our global manufacturing operations, supply chain management, and quality assurance programs.
The loss of any of these executives, or of other key members of our management team and technical staff, could impair our R&D capabilities, disrupt our manufacturing operations, damage our customer relationships, and adversely affect our ability to execute our business strategy. We do not maintain key-person life insurance on any of our executives.
We employ approximately 8,400 people worldwide across our operations in Germany, the United States, Singapore, the People's Republic of China, and the Czech Republic. Competition for skilled engineers and scientists in the semiconductor industry — and in the SiC and GaN technology segments in particular — is global and intense. Semiconductor companies, technology firms, academic institutions, and government research laboratories all compete for a limited pool of qualified talent. We may be unable to attract or retain sufficient numbers of skilled employees, particularly at our Dresden and Munich facilities, where competition for engineering talent is especially acute. If we are unable to maintain our workforce at the levels and skill sets necessary to execute our business plans, our operational capabilities and financial results could be adversely affected.
G. Intellectual Property
13. We may be unable to adequately protect our intellectual property, and third parties may claim that our products infringe their intellectual property rights.
Our business and competitive position depend in significant part on our ability to develop and protect proprietary technologies, including our SiC and GaN device designs, manufacturing processes, circuit topologies, packaging technologies, patents, trade secrets, and accumulated know-how. We rely on a combination of patents, trade secrets, employee and third-party confidentiality agreements, non-compete and non-solicitation agreements, copyright protections, and other contractual and legal measures to protect our intellectual property.
Despite these efforts, we cannot guarantee that our intellectual property will be adequately protected. Unauthorized parties may attempt to copy, reverse-engineer, or otherwise obtain and use our proprietary technology. The legal protections available for intellectual property vary significantly by jurisdiction, and enforcement of intellectual property rights in certain jurisdictions — including the People's Republic of China, where we operate our subsidiary Halcyon Shanghai Semiconductor Co., Ltd. — may be less effective, more uncertain, and more costly than in Germany or the United States. Patent prosecution, maintenance, and enforcement require significant financial and management resources, and there can be no assurance that our issued patents will provide meaningful protection, that our pending patent applications will be granted, or that our patents will not be challenged, narrowed, invalidated, or circumvented by competitors.
In addition, third parties may assert that our products, manufacturing processes, or technologies infringe their intellectual property rights. The semiconductor industry is characterized by frequent patent litigation and extensive cross-licensing arrangements. Intellectual property infringement claims, whether meritorious or not, could result in costly and protracted litigation, the diversion of management attention and resources, the payment of significant damages or royalties, the issuance of injunctions that could prevent us from selling certain products, or the need to redesign products to avoid infringement. Any of these outcomes could have a material adverse effect on our business, financial condition, and results of operations.
H. Indebtedness and Financial Risks
14. We have existing indebtedness, and our ability to service our debt or access additional financing is subject to various risks.
As of the end of the periods indicated, our total outstanding debt was approximately €1,180 million (FY2023), €1,020 million (FY2024), and €890 million (FY2025). Our net debt (total debt less cash and cash equivalents) declined from approximately €660 million as of the end of FY2023 to approximately €150 million as of the end of FY2025, reflecting our efforts to de-lever the balance sheet in advance of this offering.
We intend to use approximately $100,000,000 of the net proceeds from this offering to repay a tranche under our existing revolving credit facility, as more fully described in "Use of Proceeds" elsewhere in this prospectus. Following the application of such proceeds, we will continue to have outstanding indebtedness.
Our existing credit facilities contain financial and operating covenants that, among other things, restrict our ability to incur additional indebtedness, create liens, make certain investments, pay dividends, sell assets, and enter into certain transactions with affiliates. These covenants could limit our operational and strategic flexibility and our ability to respond to changing market conditions. A breach of any such covenant could result in an event of default under the applicable credit agreement, which could permit the lenders to accelerate the maturity of the outstanding debt and, in certain cases, terminate their lending commitments.
Our ability to make scheduled payments on our debt, to refinance our indebtedness, or to fund our planned capital expenditures depends on our future operating performance and cash generation, which are subject to economic, financial, competitive, and other factors beyond our control. If our cash flows and capital resources are insufficient to fund our debt service obligations and other commitments, we could be forced to reduce or delay capital expenditures, sell assets, seek additional equity or debt financing, or restructure our debt, any of which could have a material adverse effect on our business and financial condition. There can be no assurance that future financing will be available to us on favorable terms, or at all.
I. Acquisition and Integration Risks
15. We may pursue acquisitions, joint ventures, or strategic alliances that could be difficult to integrate and may not achieve anticipated benefits.
As part of our growth strategy, we may from time to time pursue acquisitions of complementary businesses, technologies, or product lines, or enter into joint ventures, strategic partnerships, or other collaborative arrangements. Such transactions involve significant risks and uncertainties, including:
• difficulty in identifying suitable acquisition targets or strategic partners on acceptable terms;
• the challenge of integrating acquired businesses, technologies, employees, and operations into our existing organizational structure and corporate culture;
• the diversion of management attention and resources from our core operations during the evaluation, negotiation, and integration of transactions;
• the risk that anticipated synergies, cost savings, revenue enhancements, or other strategic benefits may not be realized, or may be realized more slowly or at greater cost than projected;
• the potential for unforeseen liabilities, contingent obligations, or regulatory issues associated with acquired businesses;
• the risk of impairment of goodwill and other intangible assets recorded in connection with acquisitions; and
• potential disruption of customer, supplier, and employee relationships during transition periods.
If we pursue acquisitions or strategic transactions and are unable to successfully integrate the acquired businesses or realize the anticipated benefits, our business, financial condition, and results of operations could be materially adversely affected.
II. Risks Related to Operations in Multiple Jurisdictions
A. General International Operations
16. We operate in multiple countries and are subject to risks inherent in international operations.
Halcyon conducts business operations across multiple jurisdictions through a network of wholly owned subsidiaries and affiliated entities. Our principal operations are located in:
• Germany: Our corporate headquarters and Fab 1 are located in Munich, Germany. Fab 2 is operated by Halcyon Power Solutions GmbH in Dresden, Germany, and Fab 3 is under construction in Dresden.
• United States: Halcyon Semiconductor USA Inc. (registered address: 1209 Orange Street, Wilmington, DE 19801; principal office: 2500 Augustine Drive, Suite 100, Santa Clara, CA 95054; EIN: 84-3927561) conducts sales, application engineering, and customer support operations.
• Singapore: Halcyon Asia Pacific Pte. Ltd. serves as our Asia-Pacific regional sales and distribution hub.
• People's Republic of China: Halcyon Shanghai Semiconductor Co., Ltd., a wholly foreign-owned enterprise (WFOE), is located at No. 500 Zhangheng Road, Pudong New Area, Shanghai 201203, and operates as a sales and engineering center.
• Czech Republic: Halcyon Automotive Components s.r.o. (Technologický park 6, 612 00 Brno) operates an assembly and testing facility that supports our automotive product line.
Our international operations expose us to range risks that could materially and adversely affect our business, financial condition, and results of operations, including:
• economic instability, recession, or financial crisis in countries where we operate or where our customers are located;
• political instability, changes in government, and shifts in policy direction that create regulatory uncertainty;
• currency exchange rate fluctuations that affect the competitiveness of our pricing, the cost of our operations, and the translation of our financial results;
• trade restrictions, import and export controls, tariffs, sanctions, and embargoes that limit our ability to sell products, procure materials, or transfer technology across borders;
• differing and potentially conflicting legal and regulatory requirements across jurisdictions, including variations in tax law, environmental regulation, labor law, product liability standards, and intellectual property protection;
• difficulties in enforcing contracts, collecting receivables, and protecting intellectual property in jurisdictions with less developed legal systems;
• cultural and language differences that can complicate management oversight, employee relations, and customer interactions; and
• logistical challenges associated with managing geographically dispersed operations, including transportation costs, communication difficulties, and time zone differences.
We cannot guarantee that we will be able to effectively manage these international risks, and any failure to do so could have a material adverse effect on our business and financial results.
B. People's Republic of China
17. Our operations in the People's Republic of China are subject to significant regulatory, geopolitical, and economic risks.
We operate Halcyon Shanghai Semiconductor Co., Ltd. as a wholly foreign-owned enterprise (WFOE) at No. 500 Zhangheng Road, Pudong New Area, Shanghai 201203, People's Republic of China. This entity serves as a sales and engineering center, providing customer support, application engineering, and market development services for our Chinese and broader Asian customer base. The PRC represents a significant and growing market for power semiconductor devices, driven by the country's rapid adoption of electric vehicles, expansion of industrial automation, and investment in renewable energy infrastructure.
However, our operations in the PRC are subject to a range of significant risks, including:
Geopolitical Tensions and Trade Restrictions. Relations between the United States and the People's Republic of China have been characterized by increasing tension in recent years, particularly with respect to technology competition and national security concerns. The US government has imposed, and may continue to expand, restrictions on the export of advanced semiconductor technology and equipment to China, including through the Bureau of Industry and Security's Entity List designations, end-use controls, and foreign direct product rules under the Export Administration Regulations (EAR). Similar restrictions may be adopted by the European Union or other jurisdictions. These restrictions could limit our ability to sell certain products to Chinese customers, to transfer technology to our Shanghai operations, or to collaborate with Chinese partners on R&D activities. Retaliatory measures by the PRC government, including restrictions on the supply of critical raw materials, could also adversely affect our business.
Evolving Regulatory Environment. The PRC regulatory environment for foreign-invested enterprises in the technology sector is complex and subject to rapid change. New regulations governing foreign investment, national security reviews, data localization, cybersecurity, and technology transfer could increase our compliance costs, limit our operational flexibility, or require changes to our business model in China.
Data Privacy and Cross-Border Data Transfers. PRC data protection laws, including the Personal Information Protection Law (PIPL) and the Data Security Law (DSL), impose significant requirements on the collection, processing, storage, and cross-border transfer of personal information and important data. Compliance with these laws may require us to localize certain data in China, implement additional security measures, and undergo government-mandated security assessments for cross-border data transfers. These requirements could increase our compliance costs, restrict the flow of information within our global organization, and expose us to significant penalties for non-compliance.
Pressure to Localize. We may face pressure from the PRC government or from Chinese customers to localize manufacturing operations in China, to form joint ventures with Chinese partners, or to share proprietary technology as a condition of continued market access. Acceding to such pressure could erode our competitive advantage, expose our intellectual property to misappropriation, and conflict with the interests of our shareholders.
Economic Uncertainty. The PRC economy has experienced periods of significant volatility, and the government's economic policies, including fiscal stimulus measures, monetary policy decisions, and regulatory actions affecting specific industries, can have a material impact on business conditions. A slowdown in the Chinese economy or a disruption in the Chinese financial system could reduce demand for our products in China and adversely affect our financial results.
C. Germany. 18. As a company headquartered in Germany, we are subject to German corporate, tax, employment, and data protection laws that differ from US laws and may impose additional burdens.
Halcyon Semiconductor Aktiengesellschaft is an Aktiengesellschaft (AG) incorporated and registered in Munich, Bavaria, Federal Republic of Germany, and is recorded in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Munich under HRB 217458. As a German AG, we are subject to the corporate, tax, employment, data protection, and environmental laws and regulations of the Federal Republic of Germany, which differ in significant respects from the laws and regulations applicable to companies organized in the United States.
Two-Tier Governance and Co-Determination. German corporate governance law requires an AG to maintain a two-tier board structure consisting of a management board (Vorstand) responsible for the day-to-day management of the company and a supervisory board (Aufsichtsrat) that appoints and oversees the management board. Under the German Co-Determination Act (Mitbestimmungsgesetz), companies with more than 2,000 employees in Germany are required to have a supervisory board composed of equal numbers of shareholder representatives and employee representatives. These requirements may limit our flexibility in certain corporate decisions, including executive appointments, compensation arrangements, and strategic transactions, relative to companies governed by the laws of US states.
Data Protection. As a German company, we are subject to the General Data Protection Regulation (GDPR) (Regulation (EU) 2016/679), as supplemented by the German Federal Data Protection Act (Bundesdatenschutzgesetz, BDSG). GDPR imposes strict requirements on the processing of personal data, including requirements related to lawful bases for processing, data minimization, data subject rights, data breach notification, and cross-border data transfers. Non-compliance with GDPR can result in administrative fines of up to the greater of €20 million or 4% of annual worldwide turnover, as well as claims for damages by affected data subjects.
Tax, Labor, and Environmental Law. Changes in German tax law — including changes to corporate income tax (Körperschaftsteuer), trade tax (Gewerbesteuer), withholding tax (Kapitalertragsteuer), or value-added tax (Umsatzsteuer) — could increase our tax burden and reduce our after-tax profitability. German labor law provides employees with extensive protections, including works council rights (Betriebsrat), limitations on dismissals, and mandated employee benefits, which could increase our labor costs and limit our operational flexibility. Changes in German environmental regulations, including regulations implementing EU directives on emissions, waste management, and chemical safety, could increase our manufacturing costs and require additional capital investment.
D. United States
19. We face risks related to our US operations and our planned US listing.
Halcyon Semiconductor USA Inc., our wholly owned US subsidiary (registered address: 1209 Orange Street, Wilmington, DE 19801; principal office: 2500 Augustine Drive, Suite 100, Santa Clara, CA 95054; EIN: 84-3927561), conducts sales, application engineering, and customer support activities in the United States. In connection with this offering, we are listing our ADSs on the Nasdaq Global Select Market, which will significantly increase our exposure to US laws and regulations and our interaction with US investors, regulators, and market participants.
As a company with US operations and a US public listing, we are or will be subject to a broad range of US federal, state, and local laws and regulations, including US federal securities laws (Securities Act, Exchange Act, Sarbanes-Oxley Act), Nasdaq listing standards, US federal and state tax laws, export control and sanctions regulations (EAR, ITAR, OFAC), anti-corruption laws (FCPA), employment and labor laws, product liability laws, and environmental regulations. Compliance with this complex and evolving regulatory landscape will require significant ongoing investment in legal, compliance, and administrative resources, and will increase our operating costs.
Furthermore, our US operations expose us to the risk of litigation in US courts, including securities class action lawsuits, shareholder derivative suits, intellectual property disputes, product liability claims, and employment-related claims. Litigation in the United States can be extremely costly and time-consuming, and adverse outcomes could result in substantial monetary damages, injunctive relief, or other remedies that could materially harm our business and financial condition.
E. Currency Risk
20. We are exposed to foreign currency exchange rate fluctuations, particularly between the euro and the US dollar, which could adversely affect our reported financial results.
Halcyon reports its consolidated financial statements in euros in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). However, a meaningful portion of our revenue and expenses is denominated in currencies other than the euro, including the US dollar (through our US subsidiary, Halcyon Semiconductor USA Inc.), the Singapore dollar (through Halcyon Asia Pacific Pte. Ltd.), the Chinese renminbi (through Halcyon Shanghai Semiconductor Co., Ltd.), and the Czech koruna (through Halcyon Automotive Components s.r.o.).
Fluctuations in foreign currency exchange rates — and in particular, fluctuations in the euro/US dollar exchange rate — can have a significant impact on our reported financial results. As of January 10, 2026, the assumed EUR/USD exchange rate used for purposes of this prospectus is €1.00 = $1.078. Movements in this exchange rate affect both our reported revenue and expenses (through the translation of non-euro-denominated financial results into euros) and the US dollar value of our ADSs and any distributions thereon.
We engage in hedging activities from time to time in order to manage our exposure to foreign currency exchange rate fluctuations. However, we may not be able to effectively hedge all of our currency exposures, and the hedging instruments we use may introduce additional costs, require the posting of collateral, and expose us to counterparty credit risk. Furthermore, hedging strategies can be complex and may not perform as intended in all market conditions. To the extent that our hedging activities are ineffective or insufficient, fluctuations in exchange rates could materially adversely affect our financial results and the trading price of our ADSs.
In addition, because our ADSs are denominated in US dollars and our ordinary shares are denominated in euros, movements in the EUR/USD exchange rate will affect the US dollar value of the economic interest represented by each ADS, independently of changes in our underlying business performance. Investors purchasing our ADSs in US dollars should be aware that currency risk is an inherent component of their investment.
III. Risks Related to the ADSs and This Offering
A. Market and Liquidity Risks
21. There has been no prior public market for our ADSs in the United States, and an active trading market may not develop or be sustained.
Although our ordinary shares are listed on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) in the Prime Standard segment under the ticker symbol FRA: HCY, our American Depositary Shares have not previously been publicly traded in the United States. We intend to list our ADSs on the Nasdaq Global Select Market under the ticker symbol "HCYN" in connection with this offering, but there can be no assurance that an active, liquid trading market for our ADSs will develop or, if it develops, that such market will be sustained.
The public offering price of our ADSs (proposed range: $39.00 to $45.00 per ADS) was determined through negotiations between us, the selling shareholders, and the underwriters, and reflects a number of factors, including our historical and projected financial results, the trading price of our ordinary shares on the Frankfurt Stock Exchange, conditions in the US and global capital markets, prevailing market valuations of comparable publicly traded semiconductor companies, and the results of our marketing and bookbuilding process. The public offering price may not be indicative of the market price for our ADSs after this offering. The trading price of our ADSs may decline below the public offering price, and you may not be able to sell your ADSs at or above the price you paid.
Several factors may inhibit the development of an active and liquid trading market for our ADSs, including limited analyst research coverage, the relatively small size of our US public float compared to larger US-listed semiconductor companies, and the availability of our ordinary shares as an alternative investment on the Frankfurt Stock Exchange. If an active trading market for our ADSs does not develop or is not sustained, the liquidity of your investment and your ability to sell your ADSs at an acceptable price could be materially and adversely affected.
22. The market price of our ADSs may be volatile and could decline significantly.
The trading price of our ADSs may fluctuate significantly from time to time and may decline substantially from the initial public offering price. Factors that could cause significant fluctuations in the price of our ADSs include, but are not limited to:
• quarterly variations in our revenue, earnings, or other key operating metrics, or the failure to meet market expectations established by securities analysts or investors;
• changes in financial estimates, investment recommendations, or target prices published by securities analysts who follow our company, or the initiation or termination of analyst coverage;
• announcements by us or our competitors of new products, technological breakthroughs, strategic transactions, significant contracts, or other material developments;
• broader trends and conditions in the semiconductor industry, including cyclical fluctuations in supply and demand, capacity utilization rates, and average selling prices;
• macroeconomic and geopolitical events, including changes in interest rates, inflation, trade policy, sanctions, armed conflicts, and pandemics;
• fluctuations in the euro/US dollar exchange rate, which affect the US dollar value of the economic interest represented by our ADSs;
• changes in the market valuations of comparable publicly traded semiconductor companies;
• sales or purchases of significant amounts of our ADSs or ordinary shares by major shareholders, officers, directors, or institutional investors;
• changes in applicable laws and regulations, including export controls, tax laws, and environmental regulations, that could affect our business or the semiconductor industry generally; and
• general conditions in the US and global equity markets, including changes in investor risk appetite and sector rotation trends.
Our market capitalization as of January 10, 2026 was approximately €8.6 billion, based on approximately 215,000,000 outstanding ordinary shares on the Frankfurt Stock Exchange. Upon completion of this offering, we will have approximately 245,000,000 shares outstanding (including the 30,000,000 new ordinary shares issued in this offering), plus any shares that may be issued upon exercise of the underwriters' overallotment option. The US ADS trading market may exhibit different liquidity characteristics and volatility patterns than the Frankfurt ordinary share market, and investors should be aware that past trading performance on the Frankfurt Stock Exchange may not be indicative of future performance of the ADSs on Nasdaq.
In recent years, the stock market has experienced significant price and volume fluctuations that have often been unrelated to the operating performance of the affected companies. These broad market fluctuations may adversely affect the trading price of our ADSs. In addition, securities class action litigation has often been instituted against companies following periods of volatility in the market price of their securities. If we were subject to such litigation, it could result in substantial costs, divert management attention, and harm our reputation, regardless of the outcome.
23. Sales of substantial amounts of our ADSs or ordinary shares in the public market, or the perception that such sales may occur, could cause the price of our ADSs to decline.
After the completion of this offering, a substantial number of our ordinary shares and ADSs will be held by shareholders who may seek to sell their positions in the public market. Sales of substantial amounts of our ADSs or ordinary shares in the public market, or the perception by the market that such sales may occur, could cause the trading price of our ADSs to decline significantly.
Following the offering, our principal shareholders will hold the following approximate positions:
• Rheintal Industrieholding GmbH (the Wendt family holding company, controlled by Margarethe Wendt, Managing Director, Königsallee 60, 40212 Düsseldorf): approximately 39,445,000 ordinary shares, representing approximately 16.1% of post-offering outstanding shares.
• Kestrel Capital Partners AG: approximately 16,555,000 ordinary shares, representing approximately 6.8% of post-offering outstanding shares.
• Halcyon Employee Stock Ownership Trust (ESOT): 6,665,000 shares, representing approximately 3.1% of pre-IPO outstanding shares.
In connection with this offering, we, the selling shareholders (Rheintal Industrieholding GmbH and Kestrel Capital Partners AG), and our officers and directors have agreed to lock-up restrictions that prohibit the offer, sale, or other transfer of our ordinary shares or ADSs (or securities convertible into or exchangeable for ordinary shares or ADSs) for a period of 180 days after the date of pricing of this offering. Based on a target pricing date of July 1, 2026, the lock-up period is expected to expire on December 28, 2026. Westbridge Securities LLC, in its capacity as lock-up agent, may waive the lock-up restrictions at any time, in its sole discretion, with respect to any or all of the locked-up securities.
Upon expiration of the lock-up period (or upon any earlier waiver by Westbridge Securities LLC), a substantial number of shares will become eligible for sale in the public market, including the shares retained by Rheintal (approximately 39,445,000 shares), Kestrel (approximately 16,555,000 shares), shares held by the ESOT, and shares held by our officers and directors, subject to applicable securities law restrictions, including volume limitations under Rule 144 of the Securities Act (to the extent applicable). The sale of a significant number of these shares — or the market's perception that such sales are likely to occur — could exert substantial downward pressure on the trading price of our ADSs.
In addition, the underwriters have been granted an overallotment option to purchase up to 3,210,000 additional ADSs (representing 6,420,000 additional ordinary shares), equal to 15% of the base deal of 21,400,000 ADSs, at the public offering price less the underwriting discount. Exercise of this option would result in the issuance of additional ADSs and could have a dilutive effect on existing holders. Furthermore, we may in the future issue additional ordinary shares or securities conve

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