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Large funds accelerate the layout of China's integrated circuit industry to welcome "big red envelopes"

Release Time：

2021-09-15

Recently, the China National Integrated Circuit Industry Investment Fund, known as the "big fund" in the industry, has fully launched its investment in the field of integrated circuit manufacturing, design, packaging, equipment and other fields. It has accelerated the development of China's IC industry. The comprehensive layout of the chain has laid a solid foundation for China to develop into a global semiconductor power.

A few days ago, National Integrated Circuit Industry Investment Fund Co., Ltd., Huaxin Investment Management Co., Ltd., and Ziguang Group Co., Ltd. signed a tripartite strategic cooperation agreement in Beijing. In the next five years, the National Integrated Circuit Industry Investment Fund plans to give Tsinghua Unigroup a total amount of support of no more than 10 billion yuan in the form of equity investment. China Development Bank and Ziguang Group signed a development finance cooperation agreement on the same day, intending to cooperate in financing 20 billion yuan.

This cooperation is currently the largest combination of industry and finance in China's integrated circuit design field. Zhao Weiguo, chairman of Tsinghua Unigroup, said that integrated circuits are a typical high-capital, high-intellectual and labor-intensive industry. To achieve healthy development, there must be large-scale capital investment, sufficient human capital and appropriate and feasible product market strategies.

Previously, SMIC, China's largest integrated circuit manufacturer listed on the Stock Exchange, also announced the participation of the National Integrated Circuit Industry Investment Fund, which became SMIC's second largest shareholder with more than 10% of the shares.

Gu Wenjun, chief analyst of iSuppli Semiconductor, a world-renowned industry research institution, said that with the previous "big fund" investment in China Micro Semiconductor and Changdian Technology, it can be said that its comprehensive layout in China's integrated circuit industry has taken shape.

In June last year, the State Council announced the "Outline for the Promotion of National Integrated Circuit Industry Development", proposing the goal of the sales revenue of the integrated circuit industry to exceed 350 billion yuan by 2015, and the main links of the industrial chain to reach the international advanced level by 2030, and proposed the establishment of industrial funds, etc. Innovative support models. This has been called by some industry insiders as "a long drought meets the rain".

Wang Zhanfu, chairman of the National Integrated Circuit Industry Investment Fund Co., Ltd., said that China has the world's largest and fastest-growing integrated circuit market, but at present, a large number of domestic integrated circuit products rely on imports.

In September last year, under the guidance of the Ministry of Industry and Information Technology and the Ministry of Finance, China National Development Bank Finance Co., Ltd., China National Tobacco Corporation, Beijing Yizhuang International Investment Development Co., Ltd., etc. jointly signed the "National Integrated Circuit Industry Investment Fund Co., Ltd. Sponsor Agreement". and the "Articles of Association of the National Integrated Circuit Industry Investment Fund Co., Ltd.", marking the official establishment of the National Integrated Circuit Industry Investment Fund. According to the analysis of industry insiders, from the investment traces of the fund, it has shown many characteristics such as supporting the leader, improving the industry chain, and focusing on the balance between development and return.

Gu Wenjun believes that among the first batch of companies invested by the Fund, China Microelectronics in the equipment industry, Changjiang Electronics Technology in the packaging industry, SMIC in the manufacturing industry, and Tsinghua Unigroup in the design industry are all leaders in their respective fields. It also has the potential to drive China's integrated circuit industry to achieve leapfrog development.

On the other hand, the fund has flexible and diverse investment methods, and adopts tailor-made investments tailored to the needs of enterprises. In this batch of investment projects, there are listed companies and private companies, both equity investment and debt investment.

Gu Wenjun said that in view of the unwillingness of unlisted companies to dilute too much equity and hope to maintain the characteristics of management’s holding of the company, the fund also launched a flexible plan for financing to support companies while making direct equity investment; in the face of needs such as SMIC Listed companies with large capital expenditures directly adopted the method of investing in the parent company and entering the board of directors to help the company subscribe for new shares in an all-round way. In addition, for companies with good return prospects, such as Ziguang Group, the equity should not be too scattered, the fund has adopted a five-year long-term, flexible "two-way choice" plan.

Industry experts believe that China's integrated circuit industry is currently facing strategic opportunities for development, and this may also be the last "window period". If the industry fully seizes the favorable opportunities, it can gradually narrow the gap or even surpass it.