Records indicate that China’s state-supported chip investment fund has injected 14.56 billion yuan, equivalent to $1.99 billion, into a memory chip company known as Changxin Xinqiao. In this transaction, the China Integrated Circuit Industry Investment Fund, often referred to as the “Big Fund,” has become a major contributor, accounting for 33.15% of the company’s total registered capital. This information was updated on October 26 in the company’s registration details on the National Enterprise Credit Information Publicity System.

$2 billion is invested by China's semiconductor state fund in a memory chip company

In this illustrative image captured on February 17, 2023, a Chinese flag is positioned alongside a “Made in China” sign on a printed circuit board containing semiconductor chips.

Based on information from the company registration website Qichacha, Changxin Xinqiao was established in 2021, situated in Hefei city within the eastern Anhui province.

Zhao Lun, who serves as the general manager, also holds the positions of chairman and general manager at Changxin Memory Technology, a prominent memory chip company in China.

Changxin Xinqiao and the China Integrated Circuit Industry Investment Fund (the “Big Fund”) have not provided an immediate response to Reuters’ requests for comments.

The most recent investment by the Big Fund follows its injection of 13 billion yuan into Yangtze Memory Technologies (YMTC) earlier this year, representing one of its substantial investments in recent times.

YMTC, the sole Chinese participant in the worldwide NAND memory market, has been actively bolstering its production capabilities and research and development efforts, with the support of state financial incentives. In 2022, YMTC was sanctioned by the United States due to concerns that it might channel U.S. technology to Huawei Technologies Co Ltd.

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Changxin Xinqiao’s fundraising from the China Integrated Circuit Industry Investment Fund (“Big Fund”) is part of a more extensive expansion of registered capital. This expansion involves current investors, Changxin Xinan and Hefei Xinyi, augmenting their capital contributions by 10.4 billion yuan and 14 billion yuan, respectively.

Hefei Xinyi enjoys the support of a couple of investment platforms associated with the state asset regulator in Anhui province, as indicated in entries on the National Enterprise Credit Information Publicity System.

In 2014, China initiated the “Big Fund” as a strategy to expedite the development of its semiconductor industry, which is perceived as trailing behind that of the United States, Taiwan, and South Korea. The organization successfully raised 138.7 billion yuan for its initial fund and 204 billion yuan for its second fund.

In a report last month, Reuters revealed that the Big Fund has intentions to secure around $40 billion in another funding round as part of China’s intensified efforts to compete with its counterparts in the semiconductor industry.

Nonetheless, the fund has also been entangled in a corruption scandal, leading to an investigation into its former leader last year.

(Exchange rate: $1 = 7.3162 Chinese yuan renminbi)

Reported by Yelin Mo, Roxanne Liu in Beijing, and Brenda Goh in Shanghai; Edited by Simon Cameron-Moore.

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