China state funds pump $926M into chipmaker Hua Hong
What's the deal? Hua Hong GroupDealroom has a profile for this one. Try Dealroom → has raised US$852.5M (roughly $926 million) in a growth equity round led by Shanghai Guosheng Group, a state-backed investment vehicle. The injection lifts the registered capital of the Shanghai- and Hong Kong-listed contract chipmaker's parent to US$2.71B from US$1.86B, per a stock exchange filing.
Who's backing it? Guosheng's direct stake jumps to 41.7% from 15.3%, with its indirect holding rising to 10.2% from 3.8%. The Shanghai State-owned Assets Supervision and Administration Commission added US$2.71M, keeping its role as Hua Hong's ultimate controller.
Why now? Blocked by the US from buying the most advanced chipmaking equipment, Beijing is channelling state funds into legacy and mature-node semiconductors — generally chips made at 28-nanometre and above. These are less sophisticated than cutting-edge AI processors but essential for electric vehicles, industrial automation, Internet of Things devices, and consumer electronics.
What's the endgame? Hua Hong is accelerating its third fab project in Wuxi, in Jiangsu province. Registered capital at the joint venture managing the plant surged to $4.17 billion from US$918.5K earlier this month, drawing the National Integrated Circuit Industry Investment FundDealroom has a profile for this one. Try Dealroom → — the "Big Fund" — alongside local government capital.
Building up capacity: Known as Fab 9B, the facility began construction in March and will focus on specialty chips for power devices, analog, and embedded storage. Once fully operational, it would add 55,000 wafers to monthly production, expanding Hua Hong's total Wuxi capacity by roughly 30%.
What could go wrong? Hua Hong's Hong Kong-listed shares fell 1.1% to US$11.4, tracking a broader pullback across Chinese semiconductor stocks. Still, chairman and president Bai Peng said in May the company "did not see any impact" from US export controls on equipment procurement for the Wuxi project.
The signal: The round ranks in the 92nd percentile among growth equity deals in China's semiconductor sector over the trailing 48 months. It shows how government-coordinated financing is doubling down on domestic foundries as Washington tightens technology restrictions.
Read more: scmp.com
Image credit: Sangitiana
