China’s semiconductor sector saw a steep one-third decline in funding inflows this year amid US restrictions on advanced chips and overcapacity concerns in legacy chips, according to data from a local industry research firm.
In the first 11 months of 2024, the country’s chip industry recorded 677 investment deals, a decline of 35.9 per cent year on year. In the same period, total funding fell by 32.4 per cent year on year, according to a report released by JW Insights, a local consultancy and research firm.
The largest deal by ticket size was a 10.8 billion yuan (US$1.48 billion) funding round announced in March by ChangXin Memory Technologies (CXMT), a developer of dynamic random access memory chips, from investors that included Chinese flash memory designer GigaDevice, Hefei Industry Investment Group, and the investment arms of several major Chinese banks.
The next biggest involved mobile chip specialist Unisoc, which raised 6 billion yuan in total this year from several state-owned entities, ahead of a potential IPO planned for 2025.
Government-backed funding now dominates semiconductor investment in China, according to JW Insights. As the US-China tech war escalates, Washington has tightened Beijing’s access to advanced US technology over fears it could be used to modernise China’s military.
