Chinese State Funds Back Construction of 40nm Chip Manufacturing Facility in Shenzhen
In a bid to establish local technological sovereignty in the semiconductor industry, Chinese authorities are unreservedly financing projects aimed at advancing the nation’s semiconductor sector. The ongoing construction of the CR Micro facility in Shenzhen, which is set to produce around 40,000 silicon wafers with 40nm chips per month, has recently received financial backing from several state funds amounting to $1.7 billion.
Formally, the construction is overseen by Runpeng Semiconductors, a subsidiary of CR Micro founded in 2022. Originally, CR Micro owned 98.96% of the company’s shares, but now, a portion of these shares has been distributed among four investment funds, resulting in CR Micro’s ownership being reduced to 33%. The Big Fund, a prominent governmental investment fund focused on national industrial development, has acquired a quarter of Runpeng Semiconductors’ shares. Another state fund has obtained 10% of the company’s shares. Following this transaction, Runpeng Semiconductors’ market capitalization has surged nearly sixfold to $1.6 billion. The two other funds that have become majority shareholders have affiliations with the municipal authorities of Shenzhen.
The construction expenses for the facility are estimated at $3 billion. Upon completion, the plant will primarily focus on producing 40nm chips for the automotive industry, energy systems, consumer electronics, and industrial automation. The facility will be capable of processing around 40,000 300mm silicon wafers each month. Approximately $315 million has already been invested in engineering infrastructure, equipment procurement, and contractor services. CR Micro’s parent company currently operates facilities with the capacity to process 230,000 150mm silicon wafers and 140,000 200mm silicon wafers monthly. In the first quarter, CR Micro faced a 6.67% decrease in revenue, amounting to $315 million, with a 44% decline in net profit to $46 million. The capital restructuring plan requires shareholder approval before implementation.
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