Chinese Chip Maker Unisoc To Raise Funds Which Will Value The Company at USD 10B

Chinese chip design company Unisoc (Shanghai) Technologies Co is looking to raise 10 billion yuan ($1.5 billion) in a new funding round that will value the company at around 70 billion yuan ($10.3 billion), according to some reports. 

Per the people, Unisoc has approached several state-backed investment funds for the round, capitalising on increased local investor interest in China's domestic chip industry, which is preparing to become more self-sufficient in the face of US pressure.

Based on one of the sources, the company hopes to reach a shortlist of investors by mid-March and close the round by the end of June on its way to a domestic listing. Because the information is confidential, the sources all declined to be identified. According to its official WeChat account, the company announced last week that it was raising funds, with its board secretary, Jia Shaoxu, stating that the funds would be used to improve its technology and product competitiveness. The amount was not disclosed.

The fundraising comes as China intensifies efforts to boost its domestic chip sector, with Chinese President Xi Jinping urging the country to become more technologically self-sufficient.

Washington has imposed a slew of export controls to stymie Beijing's technological and military advances, including measures to restrict China's access to U.S. chipmaking tools and to bar it from certain chips made anywhere in the world using U.S. equipment.

The Biden administration has targeted Chinese companies such as Semiconductor Manufacturing International Corp, the country's largest chip maker, and memory chip manufacturer Yangtze Memory Technologies Co Ltd. (YMTC).

Unisoc is owned by Wise Road Capital, a private equity firm that took over the company in 2022 after its former parent company, Tsinghua Unigroup, declared bankruptcy.

Unisoc is based in Shanghai and competes with Qualcomm Inc, MediaTek Inc, and Samsung Electronics Co Ltd. Its product portfolio includes mobile processors for smartphones as well as simpler chips for other applications.

On its website, it operates in 133 countries. Although its sales are low in comparison to its competitors, Counterpoint Research estimates that the company's share of the global market for mobile processors will increase to around 10% by 2022.

In a Feb. 8 statement, the company said it had reached 14 billion yuan in revenue by 2022. According to a July 2022 statement, it had revenue of 11.7 billion yuan in 2021.

In addition to Wise Road, the company's shareholders include China's state-backed chip investment fund (known as "the Big Fund"), which has a 13% stake in the company, and Intel Capital, which has an 11% stake in the company through an investment.