China's Semiconductor State Fund Invests £2 Billion in Memory Chip Firm
Updated: Jan 8
[Edited] China's state-backed chip investment fund has made a significant investment of 14.56 billion yuan ($1.99 billion) in a memory chip company called Changxin Xinqiao, according to records.
The China Integrated Circuit Industry Investment Fund, also known as the "Big Fund," contributed 33.15% of the total registered capital of Changxin Xinqiao, as stated in an update dated Oct. 26 on the National Enterprise Credit Information Publicity System (NECIPS).
Changxin Xinqiao, founded in 2021 in Hefei city, Anhui province, is focused on the development of memory chip technologies. Its general manager, Zhao Lun, is also the general manager of ChangXin Memory Technologies, one of China's leading memory chip companies.
The company has applied for the construction of a manufacturing base for 12-inch memory wafers, according to the NECIPS database. While the nature of the project was not specified in the registry data, it is expected to be the first in China to enter mass production for integrated dynamic random access memory (DRAM) design and manufacturing. This development was announced by a contractor for the project in June last year.
Both Changxin Xinqiao and the Big Fund have not yet responded to Reuters' requests for comment regarding this investment.
This latest investment by the Big Fund follows its previous investment of 13 billion yuan in Yangtze Memory Technologies (YMTC) earlier this year, which was one of its largest investments in recent years. YMTC, China's sole player in the global NAND memory market, has been aggressively expanding its production capacity and research and development with the support of state subsidies. However, YMTC was blacklisted by the United States in 2022 due to concerns about potential technology diversion to Huawei Technologies Co Ltd.
The capital raised by Changxin Xinqiao from the Big Fund is part of a larger registered capital expansion that involves existing investors, Changxin Xinan and Hefei Xinyi, increasing their capital contributions by 10.4 billion yuan and 14 billion yuan, respectively. Hefei Xinyi is backed by investment platforms associated with the state asset regulator in Anhui province.
The Big Fund was launched in 2014 as a means to accelerate China's semiconductor industry, which is considered to be lagging behind that of the United States, Taiwan, and South Korea. The organization raised 138.7 billion yuan for its first fund and 204 billion yuan for its second fund. Reuters reported last month that the Big Fund aims to raise approximately $40 billion in another round of funding as China intensifies its efforts to catch up with its rivals. However, the fund has also faced a corruption scandal that led to an investigation into its former head last year.
The investment by the Big Fund in Changxin Xinqiao reflects China's commitment to strengthening its semiconductor industry and reducing its reliance on foreign technology. This move is part of a broader strategy to enhance domestic capabilities and compete on a global scale.
China's state-backed chip investment fund has invested $2 billion in memory chip company Changxin Xinqiao.
The investment represents 33.15% of the total registered capital of Changxin Xinqiao.
Changxin Xinqiao aims to enter mass production for integrated dynamic random access memory (DRAM) design and manufacturing.
The Big Fund previously invested in Yangtze Memory Technologies (YMTC), China's leading player in the global NAND memory market.
The investment is part of China's efforts to boost its semiconductor industry and reduce reliance on foreign technology.
Source: REUTERS