China’s Semiconductor State Fund Sinks $2 Billion into Memory Chip Firm

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China's Semiconductor State Fund Sinks $2 Billion into Memory Chip Firm
China's Semiconductor State Fund Sinks $2 Billion into Memory Chip Firm

China’s state-backed chip investment fund called the “Big Fund” contributed 33.15% of the total registered capital of Changxin Xinqiao.

According to public records, China’s state-backed chip investment fund invested 14.56 billion yuan ($1.99 billion) in Changxin Xinqiao, a memory chip business.

According to an update to the company’s registration information on the National Enterprise Credit Information Publicity System (NECIPS) dated Oct. 26, the China Integrated Circuit Industry Investment Fund, also known as the “Big Fund,” contributed 33.15% of the total registered capital of Changxin Xinqiao.

Changxin Xinqiao was created in 2021 in Hefei, Anhui province’s easternmost city, according to company registration website Qichacha.

Zhao Lun, the general manager of ChangXin Memory Technologies, one of China’s major memory chip makers, is in charge.

According to the official NECIPS database, Changxin Xinqiao has applied to develop a 12-inch memory wafer manufacturing base. According to a statement made last year in June by a contractor for the project, the project would be the first in China to move into mass production for integrated dynamic random access memory (DRAM) design and manufacturing, according to register data.

The Big Fund’s latest investment follows a 13 billion yuan investment in Yangtze Memory Technologies (YMTC) earlier this year, which was one of its largest in recent years.

With the support of state subsidies, YMTC, China’s sole player in the global NAND memory industry, has aggressively expanded production capacity and R&D. The United States blacklisted YMTC in 2022 due to concerns that the company might pass US technology to Huawei Technologies Co., Ltd.

Changxin Xinqiao’s Big Fund capital raise is part of a wider registered capital expansion that included previous investors Changxin Xinan and Hefei Xinyi, who increased their capital contributions by 10.4 billion yuan and 14 billion yuan, respectively.

According to listings in the National Enterprise Credit Information Publicity System, Hefei Xinyi is backed by a couple of investment platforms related to the state asset regulator in Anhui province.

China established the Big Fund in 2014 in order to boost its semiconductor sector, which is said to lag behind that of the United States, Taiwan, and South Korea. For its first fund, the organization raised 138.7 billion yuan, and for its second fund, it raised 204 billion yuan.

According to a report, the Big Fund plans to raise another $40 billion in a new round as China accelerates its efforts to catch up with rivals.

However, the fund has also been entangled in a corruption issue, which has resulted in an investigation against its previous CEO.

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