This domestic IDM factory has received 49 billion yuan of investment to accelerate the chip self-sufficiency rate

On March 3, it was reported that Changjiang Storage, China's largest memory chip manufacturer, received a capital injection of 49 billion yuan from investors such as Big Fund. This investment doubled its registered capital to more than 105 billion yuan.

According to the previous news of the Securities Times, in October 2022, the United States upgraded the export control of high-tech technologies such as semiconductors to China, and companies such as Changjiang Storage were listed in the "unverified list"; In December last year, 36 Chinese technology companies, including Yangtze River Storage and Cambrian, were included in the "entity list" and faced more stringent technical control.

In February of this year, it was reported that Changjiang Storage had reduced the scale of production expansion due to the impact of the upgrading of semiconductor control in China by the United States. In recent months, orders for production equipment had been significantly reduced, and the wave of order cutting had spread to local semiconductor equipment enterprises.

Changjiang Storage didn't comment on this.

According to the news, Changjiang Storage has been boosted by US $7 billion of capital from investors supported by the government, which indicates that in the increasingly tense relationship with the United States, relevant parties are redoubling their efforts to boost the domestic chip industry. According to the data of China's business registration platform Tianyan, the three latest investors recently injected 49 billion yuan into Qingyun Investment Co., Ltd., doubling its registered capital to more than 105 billion yuan.

One of the investors is the second phase of the China Integrated Circuit Industry Investment Fund, which is the second phase of the Big Fund. The fund raised 200 billion yuan in 2019, which is one of the important drivers to promote the financing development of China's semiconductor industry. Changjiang Storage was established in Wuhan, China, in 2016. The first phase of the Big Fund invested in Everlasting, and the Big Fund also invested in some of China's most advanced local chip manufacturers, including SMIC International and Huahong Semiconductor.

It is reported that another new investor of Yangtze River Storage, Yangtze River Industry Investment Group, was established in January 2022. According to the website of Yangtze River Industry Investment Group, the group has integrated the resources of several provincial investment companies located in Hubei Province, with a capital of more than 223 billion yuan. According to the data of Tianyan, the third investor, Hubei Changsheng Development, was established in Wuhan in 2021 with a registered capital of 42 billion yuan. It is jointly owned by Hubei Integrated Circuit Industry Investment Fund, Yangtze River Industry Investment Group and Optical Valley Financial Holding Group established in Wuhan East Lake New Technology Development Zone.

According to previous reports, the second plant in Changshu will break ground and start construction in 2020, which is expected to cost about 100 billion yuan, and its capacity will increase by more than twice. Since Washington announced that it would impose strict restrictions on the export of advanced semiconductor manufacturing equipment and restrict American citizens from providing support to Chinese chip manufacturers, the capital injection of investors such as the Big Fund has undoubtedly given Changjiang Storage a boost for its rapid development.

According to international business strategy data, the self-sufficiency rate of China's semiconductors will increase from 10% in 2015 to 24% in 2021. In its report published last June, the company predicted that the ratio would exceed 50% in 2030. But when the United States later strengthened the chip sanctions, the chief executive of IBS, Handel Jones, warned that China's self-sufficiency ratio might stagnate at 30% by 2030.

From the perspective of capital, in addition to investing in Yangtze River Storage, the second phase of the Big Fund continued to lay out domestic chip manufacturing and related supporting links. In January this year, Big Fund Phase II invested in Huahong Semiconductor, one of the leading manufacturers of domestic semiconductors, and jointly invested a total of US $6.7 billion to expand the company's 12-inch wafer capacity. In June last year, Big Fund Phase II also increased its investment in Huahong Wuxi subsidiary; In addition, in November last year, the fixed increase of Tongfu Micro-electricity was also subscribed by a large fund of nearly 300 million yuan.

According to the data, despite the chip anti-corruption, personnel shocks and the launch of investment projects in succession, large funds and Phase II are still important participants in the A-share semiconductor ecosystem. According to Wind statistics, as of September 30, 2022, Big Fund II ranked among the top ten shareholders of eight A-share listed companies, with a total market value of 12.411 billion yuan at the end of the period, while Big Fund (Phase I) ranked among the top ten shareholders of 28 listed companies, with a total position of 76.985 billion yuan.