China's state investors to infuse $1.7B in wafer production plant in Shenzhen - report
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State investors including China's largest government-backed chip investment fund agreed to invest RMB 12.6B ($1.7B) in a wafer production plant in Shenzhen as China tries to strengthen its domestic chip manufacturing capacity, Nikkei Asia reported.
China Resources Microelectronics (CR Micro) said in an exchange filing last week that its board approved a plan for its Shenzhen unit Runpeng Semiconductors to sell shares to certain investors.
The transaction, which still awaits shareholders approvals, will expand Runpeng's registered capital from RMB 2.4B to RMB15B, with capital infusion from National Integrated Circuit Industry Investment Fund, also known as the "Big Fund," and four other government-backed investment funds, the report added.
The transaction will reduce CR Micro's ownership in the Shenzhen unit to 33% from 98.96%, followed by the Big Fund's 25%. A new investor, the State-Owned Enterprise Structural Adjustment Fund, will own 10%.
Three Shenzhen city-backed funds, that are current stockholders of Runpeng, will be among the investors, the report added.
The investment intends to bring in strategic investors with a correlation to the core business and to provide money and industrial resource help to build a 12-inch wafer facility in Shenzhen, the report added citing CR Micro.
In February, Runpeng raised RMB2.3B to fund the Shenzhen wafer production project. The total investment expected in the project is anticipated to be about RMB22B and will create the capacity to make 40,000 wafers a month.
The manufacturing will focus on making chips of 40 nanometers and above that are mainly used in automotive electronics, new energy, industrial control and consumer electronics, the report noted.
The construction of the plant has already begun with the first tranche of RMB2.3B spent on equipment, hiring contractors and infrastructure construction.
CR Micro is China's largest integrated device manufacturer with operations in chip design and manufacturing to packaging and testing, according to the report.
Earlier this month, Chinese semiconductor industry executives had called for building up the domestic supply chain as U.S. intends to limit certain U.S. tech investments in China, depriving the country of advanced technology. The industry's self-sufficiency goal is 70% for 2035, according to the report.
U.S. President Joe Biden had signed an executive order to regulate certain U.S. investments in China in the three areas of, semiconductors and microelectronics, quantum information technologies, and artificial intelligence, or AI.
Chinaâs top tech companies, Alibaba (NYSE:BABA), Baidu (NASDAQ:BIDU), ByteDance (BDNCE) and Tencent (OTCPK:TCEHY) (OTCPK:TCTZF), reportedly this month, had placed orders worth $5B for Nvidia's (NVDA) high performance chips, which are important to make generative artificial intelligence, or AI, systems.

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