China's Runpeng Semiconductor raises $1.7b

The Big Fund, China’s biggest government-backed chip fund, will invest CNY 3.7bn for a 25% stake. China State-Owned Enterprise Structural Reform Fund will invest CNY 1.5bn for 10%.

Investment entities backed by the Shenzhen government also participated, as did the equity investment unit of state-owned vehicle manufacturer FAW Group.

The transaction will result in China Resources Microelectronics no longer being the major shareholder of Runpeng. Its stake will drop from 99% to 33%, despite the company contributing about CNY 2.6bn to the round, according to a statement.

Since its inception in in June last year, Runpeng has built a foundry for 300-milimetre wafers in Shenzhen, where production capacity is planned to reach 40,000 units a month. The output can be used in automotive electronics, new energy, industrial control, consumer electronics, and other areas.

Runpeng aims to advance the cooperation and connection of upstream and downstream industries. The idea is to develop a business that covers the entire value chain, including chip design, packaging, and testing.

It comes as geopolitical tensions have encouraged China to push for domestic production in the sector. Earlier this month, US President Joe Biden signed an executive order prohibiting outbound foreign investment in China that targets certain sensitive technologies, including semiconductors.

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• Topics
• Greater China
• Technology
• China
• semiconductor
• China Structural Reform Fund