Chinese chip designer Unisoc seeks to raise $1.5 bln in private funding -sources
14/02/2023 06:03
By Kane Wu, Josh Horwitz and Roxanne Liu
HONG KONG/SHANGHAI, Feb 14 (Reuters) - Chinese chip
design company Unisoc (Shanghai) Technologies Co is seeking to
raise 10 billion yuan ($1.5 billion) in a new funding round that
will value the firm at about 70 billion yuan ($10.3 billion),
three people with knowledge of the deal told Reuters.
Unisoc has approached several state-backed investment funds
for the round, tapping increased local investor interest in
China's domestic chip industry, which is gearing up to be more
self-sufficient in the face of U.S. pressure, the people said.
One of the people said that the company aims to reach a
shortlist of investors by mid-March, and close the round by the
end of June on the way to an eventual domestic listing. The
sources all declined to be identified as the information is
confidential.
The company announced it was raising funds last week, with
its board secretary, Jia Shaoxu, saying it would use the funds
to enhance its technology and product competitiveness, according
to its official WeChat account. It did not disclose the amount.
The fundraising comes as China ramps up efforts to boost its
domestic chip sector and Chinese President Xi Jinping urges the
country to become more technologically self-sufficient.
Washington has put in place a slew of export controls to
slow Beijing's technological and military advances, including
measures to curb China's access to U.S. chipmaking tools and cut
it off from certain chips made anywhere in the world with U.S.
equipment.
Chinese companies the Biden administration has targeted
include the country's largest chip maker, Semiconductor
Manufacturing International Corp 0981.HK , and memory chip
manufacturer Yangtze Memory Technologies Co Ltd (YMTC).
Unisoc is controlled by private equity firm Wise Road
Capital, which took over the company in 2022 after Tsinghua
Unigroup, its former parent company, faced bankruptcy.
Based in Shanghai, Unisoc competes against Qualcomm Inc
QCOM.O , MediaTek Inc 2454.TW , and Samsung Electronics Co Ltd
005930.KS , and its product portfolio includes mobile
processors for smartphones, as well as simpler chips for
internet-connected devices.
It does business in 133 countries, according to its website.
Although its sales are low compared with those of its rivals,
the company's share of global market for mobile processors
increased to roughly 10% by 2022, according to Counterpoint
Research.
In its statement from Feb. 8, it added it had reached
revenue of 14 billion yuan in 2022. A statement in July 2022
said it had revenue of 11.7 billion yuan in 2021.
In addition to Wise Road, the company's shareholders also
include also China's state-backed investment fund for chips
(known as "the Big Fund"), which has a 13% stake in the firm, as
well as Intel Capital, which retains an 11% stake in the company
via an investment from 2014.
(Reporting by Kane Wu in Hong Kong, Josh Horwitz in Shanghai
and Roxanne Liu in Beijing; Editing by Brenda Goh and Gerry
Doyle)
((kane.wu@thomsonreuters.com; +85228436590; Reuters Messaging:
kane.wu.thomsonreuters.com@reuters.net))