State-owned China Integrated Circuit Industry Investment Fund (China IC Fund) is joining a group of firms that are launching a $255-million fund to invest in semiconductor companies.
Hong Kong-listed Semiconductor Manufacturing International Corporation (SMIC) confirmed in a disclosure that its subsidiary, China IC Capital, will be working with China IC Fund, IPV Global, and L&L Capital for the establishment and management of IPV Capital Global Technology Fund.
IPV Global, the overseas merger and acquisition fund of Infotech Venture Investment, which has assets under management of over $3 billion, will act as general partner of the planned fund while the others will be limited partners.
China IC Fund will provide Rmb800 million (US$126 million) in funding and control 49.5 per cent of the fund, according to the HKEX filing. L&L Capital will own 39.29 per cent of the fund while China IC Capital and IPV Global will hold 10.21 per cent and 1 per cent, respectively.
China IC Fund, incorporated in September 2014, mainly invests in the value chain of integrated circuit industry via various approaches, primarily in integrated circuit chip manufacturing as well as chip designing, packaging test and equipment, and materials
On the other hand, China IC Capital, founded in February 2014, is a wholly-owned subsidiary of SMIC, one of the leading foundries in the world.
The fund will invest in selected companies operating in the semiconductor and related industries.
“Such investments are intended to help accelerate the development of the integrated circuit industry ecosystem in China and to excavate the potential opportunities for the exploitation and integration of resources in the industry,” according to the signed agreement.
The term of the fund will be for seven years from the first contribution date stated on the first installment notice issued by the General Partner, the agreement reads.
According to an earlier Bloomberg report, China is trying to reduce reliance on some $200 billion of annual semiconductor imports and envisions spending about $150 billion over 10 years to achieve a leading position in design and manufacturing.