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

BEIJING : Chinese auto chipmaker GTA Semiconductor recently completed a largely state-funded financing round worth over $1.8 billion, state-backed Securities Times reported on Wednesday, with the move described as a clear signal to the domestic chip manufacturing industry that Beijing is still willing to invest in it.

With this injection of capital Shanghai-based GTA Semiconductor, one of China’s largest auto chipmakers manufacturers by production, has in less than two years racked up over $2.7 billion of mostly state funds, according to the Securities Times.

The sum, which some Chinese media outlets have described as one of the largest domestic funding round this year, comes as China prepares to launch a new state-backed investment fund that aims to raise about $40 billion for its semiconductor sector, Reuters exclusively reported on Tuesday.

Reuters could not determine whether the auto chipmaker’s latest fund-raising was tied to this new fund or not.

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 large sum GTA Semiconductor raised highlights Beijing’s commitment to prop up domestic manufacturers amid an ongoing push to wean off its chipmaking capabilities from foreign dependence, according to the Securities Times.

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 per cent, making it a target for more investment in the future, the state-backed newspaper said.