Chinese chip design company Unisoc (Shanghai) Technologies has raised over 4 billion yuan ($552.2 million) in equity financing as Beijing’s push to realise semiconductor self-sufficiency is expected to bring growth opportunities to domestic players.
A group of state investment platforms in China, financial institutions, securities companies, and private capital investors participated in the deal, the China Securities Journal reported on Monday, citing people with knowledge of the matter. The media outlet is a national financial news platform published by the state-owned Xinhua News Agency.
Unisoc is said to have completed this equity financing with the approval of its board of directors to raise the capital from state investment platforms in Shanghai and Beijing, according to the report.
Other investors include subsidiaries of the Industrial and Commercial Bank of China (ICBC) and Bank of Communications, brokerage companies CSC Financial and Guotai Junan Securities, as well as PICC Capital Equity Investment, an affiliate of the government-controlled insurer People’s Insurance Company of China (PICC).
DealStreetAsia has reached out to Unisoc for comments on its fundraising updates and future listing plans.
This equity financing comes as China has been in an intensified rivalry with the US for tech supremacy, which saw Washington move to impose a slew of export controls restricting Chinese businesses from accessing US chipmaking tools, targeting especially advanced chips over national security concerns.
Unisoc is one of the world’s biggest providers of smartphone application processors (APs), which are essentially the brains of smartphones that interpret commands, calculate, and control the system, among various other functions. The Chinese company ranked fourth globally – after Taiwanese chipmaker MediaTek, as well as US giants Qualcomm and Apple – with a market share of approximately 13% in the fourth quarter of 2023, according to data provider Statista.
Its product portfolio also includes artificial intelligence (AI) chipsets, radio frequency chips, and other communication, computing, and control chips. With Transsion Holdings, Realme, and the Lenovo-owned Motorola as some of its key clients, Unisoc employs over 5,500 people with its field tests covering some 130 countries, according to its official website.
The Shanghai-headquartered company first revealed its fundraising plan in February 2023, when its board secretary Jia Shaoxu said during a company event in Shanghai that the firm initiated an equity financing round to enhance its technology and product competitiveness, according to the firm’s official WeChat account.
Its initial fundraising target was not disclosed. But a Reuters report later in the month said that Unisoc was seeking 10 billion yuan (almost $1.4 billion) at a valuation of about 70 billion yuan ($9.7 billion).
Unisoc is controlled by a consortium led by two Beijing-based private equity (PE) companies, Wise Road Capital and Beijing Jianguang Asset Management, which took over the firm as part of the strategic restructuring of its previously state-owned parent group Tsinghua Unigroup in 2022.
The strategic restructuring took roughly six months and involved, among other pledges, a cash transaction of 60 billion yuan ($8.3 billion) to pay off the debts of Tsinghua Unigroup. The group’s other key subsidiaries include publicly-listed integrated circuit (IC) maker Unigroup Guoxin Microelectronics and Tsinghua Unisplendour, which specialises in IT services.
The firm reported annual revenue of almost 14 billion yuan ($1.9 billion) in 2022, up over 20% year-over-year (YoY). Its 2021 revenue stood at 11.7 billion yuan ($1.6 billion), with an increase of 78% from the previous year, according to its disclosure.
Three months earlier, Unisoc signed a deal with five commercial banks in China to finance its development in the 5G space with credit lines. The deal granted it a combined credit line of up to 3.2 billion yuan ($441.8 million), according to multiple Chinese media reports.