China’s State-Backed Investment Fund Injects $2 bn into Changxin Xinqiao Memory Chip Company

China’s government-backed semiconductor investment fund, known as the “Big Fund,” has made a substantial investment of 14.56 billion yuan (approximately $1.99 billion) in Changxin Xinqiao, a memory chip company, according to records released. This significant move underscores China’s commitment to advancing its semiconductor industry.
BE SemiconductorThe investment by the China Integrated Circuit Industry Investment Fund, often referred to as the “Big Fund,” accounts for 33.15 percent of the total registered capital of Changxin Xinqiao. This was disclosed in an update dated October 26, 2023, in the company’s registration information, which is publicly accessible through the National Enterprise Credit Information Publicity System.

Changxin Xinqiao – A New Player in Memory Chips: Changxin Xinqiao, founded in 2021 in Hefei city, located in eastern Anhui province, is making strides in the field of memory chips. Zhao Lun, who also serves as the Chairman and General Manager of Changxin Memory Technology, one of China’s prominent memory chip companies, holds the position of General Manager at Changxin Xinqiao.

As of now, neither Changxin Xinqiao nor the “Big Fund” has responded to requests for comments from Reuters.

This noteworthy investment by the “Big Fund” follows its earlier commitment of 13 billion yuan to Yangtze Memory Technologies (YMTC) earlier this year. This was one of the largest investments made by the fund in recent years.

Expanding Memory Capacity: YMTC, the sole Chinese player in the global NAND memory market, has been actively expanding its production capacity and research and development activities, supported by state subsidies. It’s worth noting that YMTC was blacklisted by the United States in 2022 amid concerns that it could divert U.S. technology to Huawei Technologies.

Changxin Xinqiao’s capital infusion from the “Big Fund” is part of a broader expansion of registered capital. This expansion includes contributions from existing investors, Changxin Xinan, and Hefei Xinyi, who have increased their capital contributions by 10.4 billion yuan and 14 billion yuan, respectively. Hefei Xinyi enjoys backing from state asset regulator-affiliated investment platforms in Anhui province.

China’s Semiconductor Advancement: The “Big Fund” was launched in 2014 as a strategic initiative to accelerate China’s semiconductor industry, which has been perceived as trailing behind the United States, Taiwan, and South Korea. The organization raised 138.7 billion yuan for its first fund and 204 billion yuan for its second fund.

Recent reports from Reuters have indicated that the “Big Fund” aims to secure approximately $40 billion in another funding round, signaling China’s continued efforts to catch up with global competitors. However, it’s worth noting that the fund has been embroiled in a corruption scandal, leading to an investigation into its former head last year.