China raised $18.98 billion second round financing to develop chips

Tinuku - China's state-backed semiconductor fund has raised nearly 120 billion yuan (US$18.98 billion) in a second round of investment to support the development of the domestic chip sector and reduce its reliance on imports amid trade wars with the United States. The National Integrated Circuitry Investment Fund or Big Fund announces the new fund will focus on improving local chip production and technology.

China's Ministry of Industry on Wednesday said the fund is a second investment round and welcomes foreign institutions to take part. ZTE Corp. has been using chips from Qualcomm Corp. has been threatened under blocking by the US government and the European Union.

Beijing now plans to invest more in this sector and overall in response to rising trade tensions between the two countries. CDB Capital Corp. became the first and second fundraising manager. Potential investors in the second fund include local and state-owned companies.

The sources said the new funds will focus on memory chips, integrated circuit design and compound semiconductors such as silicon carbide and gallium nitride. Big Fund has previously invested in about 50 companies in the chip industry, including Semiconductor Manufacturing International Corp and Yangtze Memory Technologies.