Chinese semiconductor companies have raised $38 billion this year, double last year

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Chinese semiconductor companies have raised $38 billion this year, double last year [Copy link]

Chinese chip designs on display at the Beijing International High-Tech Expo in September

Tencent Technology News, November 17, China is investing heavily in the computer chip industry and stepping up efforts to cultivate local talent. Data from S&P Global Market Intelligence shows that so far this year, Chinese semiconductor companies have raised nearly $38 billion through public offerings, private placements and asset sales, more than double the amount raised in the whole of 2019.

Meanwhile, data from business registration trackers show that more than 50,000 Chinese companies have registered semiconductor-related businesses this year, a record four times the total five years ago. These include companies with less ties to the chip industry, such as real estate developers, cement makers and catering businesses, but all of which are reshaping themselves as chip companies in the hope of benefiting from incentive programs.

China is the world's largest importer of semiconductors. Customs data show that China bought more than $300 billion worth of foreign-made chips last year. Data from the Washington-based Semiconductor Industry Association show that Chinese companies only account for 5% of the global market share of semiconductors. Semiconductors are tiny processors that are increasingly important to manufacturers of smartphones, cars and other Chinese exports.

“It’s about protecting the supply chain,” said Adam Zhao, managing director of Yunxiu Capital, a Shanghai-based investment firm that invests in semiconductor startups.

With an influx of talent, the number of chip-related Chinese companies registered this year hit a new record

Indeed, China has spent billions of dollars since the 1950s nurturing a domestic chip industry, first through central planning and then with the help of foreign joint ventures, and the latest effort relies more on the private sector than on the largely state-driven approach of the past.

“Now the whole society is working hard to cultivate domestic resources so that no company will be dragged down by unpredictable supply,” said Wang Dan, an analyst at market research firm Gavekal Dragonomics.

Starting in 2019, universities have prioritized programs dedicated to training a new generation of semiconductor experts, seeking to address the industry's shortage of 250,000 skilled workers by 2022. "There is no shortcut to chip development, and accumulating engineers' experience and technical know-how is the key to success," said Szeho Ng, head of semiconductor research at Huaxing Securities.

Six Chinese provinces have pledged to invest about $13 billion in semiconductors this year, according to official media and government statements.

Chinese companies stepping up chip investments include e-commerce giant Alibaba and electric car maker BYD. But they also include companies like Gansu Shangfeng Cement Co., which poured $38 million into an investment fund to finance a semiconductor joint venture despite having no prior experience in chips. Shangfeng said in a stock filing that it was looking to diversify its investments.

freebsder

These include companies with less ties to the chip industry, such as real estate developers, cement makers and restaurant businesses, but all of which are reshaping themselves as chip companies in the hope of benefiting from the incentive scheme.

Damn, the wind is blowing again and the pigs are flying again.

maoshen

freebsder Published on 2020-11-18 18:29 These companies include real estate developers, cement manufacturers and catering companies that have little connection with the chip industry, but all of them are reshaping themselves...

Someone will withdraw their investment at any minute...