3 E Network Technology Group Limited (NASDAQ: MASK) secured a $1.3 million convertible note agreement with an institutional investor and announced the establishment of its Chip Business Unit, according to a company statement.

The Hong Kong-based business-to-business information technology solutions provider plans to use the funding to advance its semiconductor development strategy. The company aims to transition from a system integrator to a developer of proprietary chips.

The newly formed Chip Business Unit will focus on four areas: establishing research and development centers and recruiting semiconductor talent, developing storage controller chips for artificial intelligence applications, acquiring intellectual property licenses and design tools, and securing manufacturing capacity.

The funding will support development of storage controller chips designed for AI computing environments, with emphasis on addressing input/output bottlenecks in AI systems. The company plans to invest in Electronic Design Automation toolchains and semiconductor intellectual property licenses.

"Innovation in the semiconductor industry is a relay race of both technology and capital," said Siyang Hu, Vice President of 3 E Network. "The recent institutional funding marks a solid beginning to our proactive financing roadmap."

Chief Executive Officer Tingjun Yang stated that the company is transforming into a full-stack AI infrastructure provider. The financing strategy is designed to provide resources for building technological capabilities, according to Yang.

3 E Network operates two main business portfolios: data center operation services and software development. The company describes itself as committed to becoming an AI infrastructure solutions provider.