In another sign of Beijing’s push to ramp up its domestic chip industry, one of China’s largest auto chipmakers has racked up billions in state-backed funding.
Chinese auto chipmaker GTA Semiconductor completed a largely state-funded financing round worth over $1.8 billion this week, according to a report by state media Securities Times.
That took the Shanghai-based chipmaker’s total backing to over $2.7 billion of mostly state funds, the Securities Times report said on Wednesday.
The sum, which some Chinese media outlets have described as one of the largest domestic funding round this year, comes as Beijing prepares to launch a new state-backed investment fund that aims to raise about $40 billion for its semiconductor sector.
Reuters could not determine whether the auto chipmaker’s latest fund-raising was tied to this new fund or not.
Securities Times said, however, that the investment round was a clear signal to the domestic chipmaking industry that Beijing is willing to invest in it in order to end the country’s reliance on foreign semiconductor firms.
While most cars use chips that are not technologically advanced, the rate at which these chips in China are being replaced by domestic manufacturers is lower than 10%, making it a target for more investment in the future, the state-backed newspaper said.
GTA Semiconductor has been backed by state-owned venture capital firms like Shanghai-based Spinnotec, which first announced the $1.8 billion fund-raising round on Monday, without specifying the entities involved.
The chipmaker, founded in 2017, manufactures semiconductors used in automobiles and the power equipment, including smart grids and rail transport, according to a Yicai report.
The company has previously been backed by the Shanghai Integrated Circuit Industry Investment Fund Management, Xiaomi Yangtze River Industrial Fund Partnership, Huada Semiconductor and SAIC Motor’s Shangqi Capital.
- Reuters, with additional inputs from Vishakha Saxena