CTC Capital leads $72m round for China substrates specialist

Additional contributions came from SL Capital – a joint venture between Korea’s SK Group and China’s Legend Capital – Lanhor Capital, a fund linked to Jiangbei New Area in Jiangsu province, the venture capital unit of Tianjin Economic-Technological Development Area (TEDA), and Star Capital.

Several existing investors re-upped, including Kunqiao Capital, SummitView Capital, and Gaorong Capital, according to a statement. The proceeds will be used for production line expansion and investment in R&D.

Once a chip is cast in silicon, the semiconductor material is placed in a casing – or packaged – to prevent physical damage. The case holds the semiconductor die and connects the chip to a printed circuit board (PCB). Substrates are packaging materials that not only protect the chip and facilitate heat dissipation, but also provide the electronic connection between chip and PCB.

Substrates currently account for more than 50% of overall sales value in packaging materials, the statement noted. The global market for these products was worth more than USD 15bn in 2022, with continued growth to be driven by the development of 5G, artificial intelligence, high-performance computing, data centres, and automotive electronics.

At present, Chinese packaging substrate companies trail their global peers on technology and cost, resulting in less than 5% of demand being met by local sources. AaltoSemi aspires to realise localisation of high-end substrates and the formation of independent industrial supply chains.

This is the third China semiconductor packaging investment in the past couple of months predicated on breaking the near foreign monopoly on the domestic industry. Previously, Jiangsu Jing Chuang Advanced (JCA) Electronic Technology raised a Series B extension of several hundreds of million renminbi and SJ Semiconductor received a Series C of USD 340m.

AaltoSemi provides an end-to-end solution – encompassing R&D, design, production, testing, and sales – for substrates using bismaleimide triazine (BT) resin and Ajinomoto build-up film (ABF). Its 415-acre factory in Nanjing cost CNY 4.5bn to build, across the first two phases, and has an annual output capacity of 1.45m substrates.

“Substrate technology, processes, and commercial thresholds for advanced packaging are very high. A high-end IC substrate supplier with sizeable production capacity and forward-looking R&D capabilities is urgently required given the rapid growth of China’s chip industry and the rapid changes taking place in the global semiconductor industry,” said Guoyi Zeng, a partner at CTC Capital.

He noted that the AaltoSemi team is drawn from leading international semiconductor companies and has the requisite experience in R&D, mass production, supply chain management, and business development.

China Renaissance served as the exclusive financial advisor for AaltoSemi’s funding round.

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• Topics
• Greater China
• Early-stage
• Technology
• Industrials
• China
• semiconductor
• manufacturing
• CTC Capital
• Legend Capital
• Gaorong Capital
• SummitView Capital