Chinese IC packaging firm Leader-Tech raises nearly $100m Series A+ round

Photo by Adi Goldstein on Unsplash

Jiangsu Leader-Tech Semiconductor has closed 700 million yuan ($98.8 million) in a Series A+ round of financing as the Chinese provider of integrated circuit (IC) materials and packaging solutions targets to ramp up investment in technology R&D and manufacturing expansion to deliver domestically-made chips.

The five-year-old company raised the funding from three lead investors, including Guangdong Macao Semiconductor Industry Investment Fund, a 10-billion-yuan ($1.4 billion) IC fund investing in southern China, Leader-Tech announced in a post on its official WeChat account on Thursday.

Guangzhou Industrial and Emerging Development Fund, a government-backed investment platform in China’s Guangzhou City, and CITIC Securities’ private investment subsidiary Goldstone Investment co-led the deal, with participation from a range of low-profile domestic investors such as Dening Capital and Qianhai Great Wall Fund.

Leader-Tech primarily focuses on the development of chip on film (COF) for application in LED displays. COF is a new semiconductor technology wherein the microchip is specifically mounted on and electrically associated with a flexible circuit rather than the typical printed circuit board.

Its advantages, such as low weight, cheaper production costs, higher reliability and better thermal durability than traditional packaging solutions, have made COF a sought-after technology widely adopted in ICs for areas including high-end medical equipment and new energy vehicles.

Leader-Tech, which now serves both domestic IC companies as well as overseas clients such as Japan’s Toshiba Corporation and Sharp Corporation, was created by Chinese entrepreneur Li Xiaohua in 2017 when China’s COF technology was still nascent.

The Series A+ round, which took Leader-Tech less than six months to raise, is expected to help the firm replenish its working capital and forge long-term strategic cooperation to speed up the construction of new manufacturing facilities and its expansion in the domestic market.

Liu Dan, managing director of Guangdong Macao Semiconductor Industry Investment Fund, saw “a huge supply-chain opportunity in producing domestic replacement” of COF products in the field of LED display manufacturing.

“An increasing proportion of the world’s LED display production is moving to mainland China, with Chinese enterprises currently contributing to over half of the global market output. However, the country only produces less than 10% of the high-end materials needed for LED manufacturing,” Liu wrote in the post.

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