Today: 16-04-2024

Power Moves: China's Semiconductor State Fund Pours $2 Billion into Cutting-Edge Memory Chip Firm

BEIJING, Oct 31 (Reuters) — In a strategic move amplifying China's prowess in the semiconductor arena, the state-backed China Integrated Circuit Industry Investment Fund, widely known as the "Big Fund," has injected a substantial 14.56 billion yuan ($1.99 billion) into Changxin Xinqiao, a burgeoning player in the memory chip landscape. According to records updated on Oct. 26 in the National Enterprise Credit Information Publicity System (NECIPS), this investment corresponds to 33.15% of the total registered capital of Changxin Xinqiao.

Established in 2021 in Hefei city, located in the eastern Anhui province, Changxin Xinqiao is led by General Manager Zhao Lun, who also spearheads ChangXin Memory Technologies, a prominent figure in China's dynamic memory chip sector. The company is making strides by applying for the construction of a manufacturing base dedicated to 12-inch memory wafers, as revealed in the official NECIPS database. While the nature of the project remains unspecified in the registry data, it is anticipated to be a groundbreaking initiative, marking China's inaugural foray into mass production for integrated dynamic random access memory (DRAM) design and manufacturing.

Notably, both Changxin Xinqiao and the Big Fund have maintained silence in response to Reuters' inquiries, leaving the industry and observers eagerly awaiting further details. This strategic investment by the Big Fund comes hot on the heels of its substantial 13 billion yuan infusion into Yangtze Memory Technologies (YMTC) earlier this year, solidifying its reputation as a key financial pillar in China's semiconductor landscape. YMTC, China's exclusive representative in the global NAND memory market, has been fervently expanding its production capacity and research and development initiatives, supported by state subsidies.

It's worth noting that YMTC found itself on the United States' blacklist in 2022 amid concerns over potential technology diversion to Huawei Technologies Co Ltd. Changxin Xinqiao's capital raising from the Big Fund is integral to a broader registered capital expansion, with existing investors Changxin Xinan and Hefei Xinyi augmenting their contributions by 10.4 billion yuan and 14 billion yuan, respectively. Hefei Xinyi, in particular, is bolstered by investment platforms affiliated with the state asset regulator in Anhui province, underscoring the intricate web of strategic investments shaping China's semiconductor landscape.

Initiated in 2014, China's Big Fund emerged as a strategic initiative to propel its semiconductor sector, perceived as trailing behind the technological advancements of the United States, Taiwan, and South Korea. With an initial fund amassing 138.7 billion yuan and a subsequent fund securing a formidable 204 billion yuan, the Big Fund has been a cornerstone in China's quest to bridge the semiconductor gap. In a bid to further fortify its position, recent reports from Reuters reveal the Big Fund's ambitious plan to mobilize approximately $40 billion in an upcoming funding round, illustrating China's determined push to narrow the technological divide.

However, the Big Fund has not been immune to controversy. A corruption scandal, unraveling last year, cast a shadow over the organization, prompting an investigation into its former head. Despite these challenges, the Big Fund remains a pivotal player in China's semiconductor narrative, navigating a complex landscape as it strives to catalyze technological advancements and foster innovation. The ongoing developments underscore the multifaceted dynamics shaping China's semiconductor trajectory, where ambition and challenges intersect in the pursuit of technological excellence. ( $1 = 7.3162 Chinese yuan renminbi)

In conclusion, China's semiconductor ambitions, symbolized by the Big Fund launched in 2014, stand at the forefront of the nation's efforts to narrow the gap with global technological leaders. Despite facing challenges such as a corruption scandal that triggered an investigation into its former head, the Big Fund continues to play a pivotal role in steering China's semiconductor landscape. The recent revelation of plans to raise an additional $40 billion in funding underscores the country's unwavering commitment to fostering innovation and catching up with international rivals.

As China intensifies its focus on the semiconductor industry, the intricate interplay of ambition and adversity defines its journey. The saga of the Big Fund reflects not only the complexities inherent in navigating this high-stakes arena but also the determination to overcome obstacles and achieve technological excellence. The unfolding narrative of China's semiconductor trajectory serves as a testament to the evolving dynamics of global competition and the nation's resilience in the pursuit of technological ascendancy.