Chip unicorns emerge in China's Yangtze River Delta

Annie Huang, Taipei; Jingyue Hsiao, DIGITIMES Asia 0


China-based GTA Semiconductor raised CNY13.5 billion (US$1.87 billion) in financing, the latest example of a chip unicorn emerging in China's Yangtze River Delta thanks to state funds and incentive policies launched by China's central and local governments.

In September 2023, Shanghai-based GTA Semiconductor received strategic investments from China state funds, the aforementioned CNY13.5 billion in financing. The chip company has raised CNY21.5 billion within two years.

Zhejiang-based RongSemi, founded in 2021, secured financing in April 2023. The company is the only fully private pure-play foundry in China and is engaged in foundry and OSAT business with 300mm wafers. RongSemi's investors include Yu Renrong, chairman and co-founder of Will Semiconductor, and Wang Xing, CEO and co-founder of Meituan.

With the backing of 29 investors, Anhui-based YASC Semi completed over CNY3.8 billion in series A financing in June 2023, setting a record for the highest amount in China's SiC industry. The firm provides foundry service for SiC chips and has an annual capacity of 60,000 wafers at its Wuhu facility. Meanwhile, In the past two to three years, Jiangsu Province has seen over a dozen financing cases in the pure-play foundry industry.

In addition to individual efforts by private companies to attract investments, the Yangtze River Delta has seen active involvement from local venture capitals in the semiconductor field, including SAIC Motor, which partnered with several local asset management companies in Shanghai to form a multi-billion yuan fund with a focus on the semiconductor supply chain and chips for smart vehicles and electrification.

Zhejiang, Anhui, Jiangsu, and other regional provinces have also announced the establishment of industrial funds, respectively. For example, in April 2023, Huzhou, Zhejiang, announced the creation of an industry fund with a total scale of no less than CNY20 billion. In February, Suzhou, Jiangsu, established a CNY5 billion fund covering various sectors such as semiconductors, optoelectronics, AI, big data, new materials, and high-end equipment manufacturing.

The most notable fund in the Delta is the second phase of the Yangtze River Delta Fund, with a scale of CNY10 billion, after the first phase completed all its investments. The two phases have a combined scale of CNY14 billion, and the second phase will focus on semiconductors, biopharmaceuticals, and AI.

Meanwhile, local governments in the Yangtze River Delta launched policy and financial support to develop the semiconductor industry, with Jiangshu providing CNY1 million reward to chip companies that make it to the first-time inclusion in the China top 500, and Shanghai offering varying amounts of subsidies for research and development in components and materials.