Unisoc seeks 10 billion yuan funding as China kicks off domestic chip industry

Chinese chip design firm Unisoc (Shanghai) Technologies is seeking to raise 10 billion yuan (about Rs 12,150 crore) in a new funding round that will value the company at around 70 billion yuan (about Rs 85,000 crore), three people with knowledge of the deal told Reuters.

Unisoc has approached several state-backed investment funds for the round, tapping into increased local investor interest in China’s chip industry, which is preparing to be more self-sufficient in the face of US pressure, the people said. .

One of the people said the company aims to reach a shortlist of investors by mid-March and close the round by the end of June on its way to an eventual national listing. The sources all declined to be identified as the information is confidential. The company announced it was raising funds last week, and its board secretary, Jia Shaoxu, said it would use the funds to improve its technology and product competitiveness, according to its official WeChat account. . He did not disclose the amount.

The fundraiser comes as China steps up efforts to boost its domestic chip industry and Chinese President Xi Jinping urges the country to become more technologically self-sufficient.

Washington has implemented a series of export controls to slow Beijing’s technological and military advances, including measures to restrict China’s access to U.S. chipmaking tools and cutting it off from some manufactured chips. all over the world with American equipment.

Chinese companies targeted by the Biden administration include the country’s largest chipmaker, Semiconductor Manufacturing International Corporation (SMIC), and memory chipmaker Yangtze Memory Technologies Corporation (YMTC).

Unisoc is controlled by private equity firm Wise Road Capital, which took over the company in 2022 after Tsinghua Unigroup, its former parent company, went bankrupt.

Shanghai-based Unisoc competes with Qualcomm, MediaTek and Samsung, and its product portfolio includes mobile processors for smartphones, as well as simpler chips for internet-connected devices.

It does business in 133 countries, according to its website. Although its sales are weak compared to those of its rivals, the company’s share of the global mobile processor market has increased to around 10% by 2022, according to Counterpoint Research.

In his February 8 statement, he added that he had reached a turnover of CNY 14 billion (about Rs 17,000 crore) in 2022. A statement from July 2022 stated that he had a turnover of business of CNY 11.7 billion (about Rs 14,200 crore) in 2021.

Besides Wise Road, the company’s shareholders also include China’s state-backed chip investment fund (known as “Big Fund”), which has a 13% stake in the company, as well as Intel Capital, which retains an 11% stake. percentage of ownership in the company via investment from 2014.

© Thomson Reuters 2023