Beijing prepares new chip fund as auto chipmaker raises over $1.8 billion

Chinese auto chipmaker GTA Semiconductor recently finished a financing round worth over $1.8 billion that was largely state-funded, according to a report from the state-backed Securities Times on Wednesday. The move has been hailed as a clear indication to the domestic chip manufacturing industry that Beijing is still willing to invest in it.

According to the Securities Times, Shanghai-based GTA Semiconductor, one of China’s leading auto chipmakers by production, has combined almost $2.7 billion in total assets in less than two years, the majority of which are from state provided funds.

The latest development comes as China gears up to launch a new state-backed investment fund that wants to gather around $40 billion for its semiconductor sector. Some Chinese media sites have called it one of the largest domestic funding rounds this year.

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Whether or whether the car chipmaker’s most recent fund-raising was connected to this new fund is unknown to Reuters.

State-owned venture capital firms like Shanghai’s Spinnotec, which made the initial announcement of the $1.8 billion fund-raising round on Monday without disclosing the parties involved, have backed GTA Semiconductor.

According to the Securities Times, Beijing’s commitment to supporting domestic manufacturers in the midst of a campaign to limit its chipmaking capabilities from international dependence is shown by the size of the money GTA Semiconductor raised.

Although the majority of automobiles employ outdated chips, the rate at which these chips are being replaced in China by domestic producers is less than 10 per cent, making it a target for additional investment in the future, according to the state-backed publication.

(With inputs from Reuters)

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