Chinese chip design startup Unisoc seeks to raise $1.5 billion in private funding

In the wake of US sanctions on China’s semiconductor industry, the country has stepped up its efforts to develop the domestic chip industry and become self-reliant. The Chinese government has also poured billions of dollars into research and development into the space through state-backed investment funds. Now, one Chinese tech startup is gearing up to help China build its own chip and tap increased local investor interest in China’s domestic chip market.

Unisoc Technologies, a Chinese chip design startup, 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), according to an exclusive report from Reuters, citing three people with knowledge of the deal.

Per the report, Unisoc has approached several of China’s state-backed investment funds for the round. One of the sources told Reuters that Unisoc aims to reach a shortlist of investors by the middle of March this year and close the round by the end of June on the way to an eventual domestic listing. However, all the sources declined to be identified as the information is confidential.

Just last week, Unisoc announced it was raising funds, 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.

Unisoc is owned by private equity firm Wise Road Capital, which took over the company in 2022 after Tsinghua Unigroup after its former parent company went bankrupt.

Based in Shanghai, Unisoc competes against semiconductor giants including Qualcomm, MediaTek, and Samsung Electronics. The company’s product portfolio includes mobile processors for smartphones, as well as simpler chips for Internet-connected devices. According to its website, Unisoc currently does business in 133 countries. Its share of the global market for mobile processors increased to roughly 10% by 2022, according to Counterpoint Research.

The fundraising comes at a time when China is trying to ramp up efforts to boost its domestic chip sector and Chinese President Xi Jinping urges the country to become more technologically self-sufficient.

China has been trying to bolster its chip industry for over a decade through the acquisition of Western chip technologies from companies in Europe and the United States. As we reported back in 2021, China was planning to acquire UK’s largest and last remaining advanced chip factory in England but the negotiations stalled after objections from British lawmakers.

Through the Chinese-owned Nexperia, China wanted to capture Europe’s semiconductor market with the acquisition of the UK’s largest microchip plant as the semiconductor shortage spreads across the globe. The acquisition also prompted concerns about foreign powers owning key assets in the UK.

The Chinese-owned Nexperia wanted to take over Newport Wafer Fab, Britain’s largest microchip factory in a deal worth around £63 million ($87 million) before the deal was put on hold.