Aside from major players like SMIC, TSMC, and Huawei’s HiSilicon, China has launched a national initiative to bolster its capabilities in semiconductor technology, where the country has been hugely reliant on imported chips in the past. This directive has caught the attention of startups and VCs alike, who are keen to capitalize on this industry via semiconductor startups.
In the wake of this trend, here are the top 10 Chinese semiconductor startups to watch:
- Eswin Computing
- Changxin Memory Technologies
- Senscomm Semiconductor
- Yangtze Memory Technologies
- ProPlus Electronics
- Spectrum Materials
- Silicon Integrated
- ASR Microelectronics
- OnMicro Corporation
- Iluvatar CoreX
1. Eswin Computing
Founded: Beijing, 2016
Latest funding: Series B in June 2020
Eswin focuses on the design of human-computer interaction integrated circuits, mainly for use in IoT devices like wearables. Eswin’s founder and CEO is Wang Dongsheng, who previously served as chairman of BOE Technology Group, a Chinese giant that produces displays for smartphones and TVs, before leaving the company after 26 years in 2019.
The semiconductor startup began to construct its new production facilities in Xi’an, Shaanxi province at the end of 2017, and in December, the first batches of products were completed. The company’s manufacturing capacity in Xi’an was expected to reach mass production in mid-2020 and is estimate to generate RMB 4.5 billion annually.
Read more: Chinese IoT chip developer Eswin scores USD 283 million in investment
2. Changxin Memory Technologies
Founded: Hefei, Anhui province, 2016
Latest funding/valuation: CNY 150 million (USD 21 million) state-funded
Changxin Memory Technologies specializes in producing dynamic random access memory (DRAM), and is a market leader in this space. The company has over 3,000 employees with over 70% dedicated to research and development.
Changxin expects to quadruple production of DRAM chips to 40,000 wafers a month, or 3% of total world DRAM output. CEO Yiming Zhu has already invested RMB 15 billion (USD 2.5 billion) into technology and R&D. The company also focuses on local talent, recruiting roughly 500 Chinese college graduates each year to bolster their talent development.
3. Senscomm Semiconductor
Founded: Suzhou, Jiangsu province, 2018
Latest funding/valuation: Series A round in February 2020
The firm aims to mass-produce new system on a chip (SoC) products supporting WiFi 6, while also looking towards future consumer-facing products with Internet of Things (IoT) applications as well as virtual reality (VR) and augmented reality (AR). The latest funding round, led by Xiaomi’s investment arm Hubei Xiaomi Yangtze River Industrial Fund and joined by Glory Ventures, will go towards expanding its engineering team and exploring new markets.
The company has previously developed and mass-produced more than 20 SoC for Wi-Fi, Bluetooth, and cellular 4G. Senscomm’s management team brings experience from the US and South Korea, while the firm’s engineers have over 20 years of experience at reputable firms like Qualcomm, Samsung, and SK Telecom.
Read more: Suzhou-based firm Senscomm Semiconductor scores investment from Xiaomi-backed industry fund
4. Yangtze Memory Technologies
Founded: Wuhan, Hubei province, 2016
Latest funding/valuation: state-funded
State-backed company Yangtze Memory Technologies, which counts Huawei and Lenovo among its major customers, makes NAND flash memory chips and expects to triple production to 60,000 wafers a month, or 5% of world output, by the end of 2020.
NAND chips use electronic storage to increase storage density and minimize the area required on the chip. With a higher maximum chip capacity, NAND chips are used in everyday electronics from smartphones, cameras, and USB storage to displays and laptops.
Read more: Wuhan tech plants to continue operation amid coronavirus lockdown
5. ProPlus Electronics
Founded: Jinan, Shandong province, 2010
Latest funding/valuation: Series B in May 2020
ProPlus Electronics develops electronic design automation (EDA) software used by chipmakers to design their products. The company also provides fast circuit simulation solutions to increase chipmakers’ speed of production. In addition, the firm uses design for yield (DFY) technology, which can maximize chip storage capacity.
Current leaders in this space are semiconductor startups hailing from the US, including, Cadence Design Systems Inc, Mentor Graphics, and Synopsys Inc. Series B investors included US chipmaker Intel.
6. Spectrum Materials
Founded: Quanzhou, Fujian province, 2009
Latest funding/valuation: Series B in May 2020
Spectrum Materials is a supplier of high-purity specialty gas and materials for semiconductor fabs. The company also owns more than 20 patents while servicing clients including TSMC, SMIC, Toshiba, and Nany. Meanwhile, Intel was a participant in Spectrum’s recent Series B round.
The company also specializes in the construction and design of semiconductor plants. Spectrum’s services are crucial to the semiconductor fabrication process, as the quality of the electronic gases directly determines the integrated circuit product performance and yield.
7. Silicon Integrated
Founded: Wuhan, Hubei province, 2016
Latest funding: Series B in June 2020
Silicon Integrated develops high-performance analog and mixed-signal chips and application systems and boasts R&D and sales centers in Shenzhen, Shanghai, Europe, and the Americas. In March 2020, the company unveiled a new optical sensor that can be used for facial recognition in a variety of scenarios including smartphone hardware.
In its latest funding round, the firm bagged RMB 180 million (USD 25.3 million), led by CTC Capital and with the participation of Allin Capital, Source Code Capital, and Jiangmen Investment Fund.
Read more: Wuhan-based chip design startup closes USD 25.3 million Series B round
8. ASR Microelectronics
Founded: Shanghai, 2015
Latest funding/valuation: Series D+ in May 2020
ASR Microelectronics focuses on chips for a variety of consumer electronics uses, including mobile intelligent terminals, IoT, and navigation, while the firm’s biggest shareholder is Alibaba, with a 21.75% stake.
In its latest Series D+ funding round, secured USD 119 million by China Internet Investment Fund, with Sequoia Capital China and Hillhouse Capital among other investors.ASR Microelectronics post-financing valuation sits at USD 1.6 billion, one of the largest among semiconductor startups in China.
Read more: Xiaomi moves in on chip industry with investments in two suppliers
9. OnMicro Corporation
Founded: Shenzhen, Guangdong province, 2012
Latest funding/valuation: Series C in February 2020
OnMicro creates chips for IoT applications, wireless communications terminals, and other front-end chip solutions. Originally founded in Beijing, the company moved to its Shenzhen headquarters in 2019. The startup counts Chinese smartphone giant Xiaomi (HKG: 1810) as its third-largest shareholder, holding a 6.98% stake in the company.
The firm’s customers include Samsung, Nokia, ZTE, TECNO, and China Mobile. OnMicro is currently working on the next generation of chip technology as it develops its 5G RF front-end chip and IoT SoC chips, eagerly awaiting the widespread adoption of 5G networks in China.
10. Iluvatar CoreX
Founded: Nanjing, Jiangsu province, 2015
Latest funding/valuation: Series B in September 2019
Founded by former Oracle employee Li Yunpeng, Illuvatar CoreX features a series of in-house chip products called Big Island and Treasure Island, while it also boasts a machine learning platform called SkyDiscovery. Its latest capital haul will go towards mass production, R&D, and market expansion. Many of its engineers hail from notable industry names like Oracle, AMD/ATI and Fujitsu.
Read more: Chinese AI chipmaker Iluvatar CoreX raises several hundred million RMB in Series B round
The outlook for China semiconductor startups
Currently, Chinese consumption of semiconductors has been growing faster than any other market, accounting for around 60% of global consumption in 2019, while domestic demand far exceeds the supply.
The Chinese government is keen to correct this imbalance by focusing more support for local startups in this area. Firms could tap domestic exchanges like the Shanghai STAR market to fuel this transition to self-sufficiency in key components. In fact, semiconductor companies listed on the Shanghai STAR market performed especially well in the first quarter of 2020.