Jiangsu Xinhua Semiconductor Technology, a Chinese firm that develops, manufactures, and sells semiconductor materials, has secured 1 billion yuan ($140.5 million) in a Series B funding round.
Xinhua, which focuses on the production of electronic-grade polysilicon, a highly purified form of silicon used in mainstream semiconductor devices and circuits, raised the fresh capital from several domestic investment firms.
CNBM New Materials Fund, a 20-billion-yuan ($2.8 billion) fund backed by China National Building Material (CNBM), the country’s largest cement and gypsum board producer, participated in the Series B round.
Other investors include CCB Investment, a subsidiary of China Construction Bank (CCB); and China’s state-backed investment companies like Shanghai Pudong Innotek Capital, Chengdu Science & Technology Innovation Investment Group, and CRCC Transformation and Upgrade Fund. China-based Oriza-Rivertown Capital, Yuhai Capital, and Hudson Capital also backed the deal.
The completion of Xinhua’s Series B round comes amid growing enthusiasm among China-focused fund managers to make bets on the country’s booming semiconductor and other advanced tech industries. China’s ongoing trade tensions and tech rivalry with the US are driving more focus within domestic China to build its homegrown chips.
Headquartered in the Jiangsu Province in eastern China, Xinhua is building a plant with an expected annual production capacity of 10,000 tonnes of electronic-grade polysilicon in northern China’s Inner Mongolia autonomous region. It started the construction of the plant in 2022, with a target to put it into operation by the end of 2023.
Xinhua was founded in 2015 with investments from the state-backed China Integrated Circuit Industry Investment Fund, also known as the “Big Fund,” and the listed Chinese renewable energy and new materials provider, GCL System Integration Technology.
Prior to the Series B round, Xinhua hired China Merchants Securities to receive a pre-listing tutorial, a process that typically happens before a company files for an initial public offering (IPO) on a stock exchange in mainland China, the country’s securities regulatory China Securities Regulatory Commission (CSRC) disclosed in April 2022.
The firm raised its Series A round from investors including Cowin Capital and SDIC Venture Capital in 2021.