China’s ‘Big Fund’ Injects CNY 2.25 Billion into Mobile Chipset Maker UNISOC

Author: Ivan Platonov Mar 17, 2020 08:07 PM (GMT+8)

The fabless company is currently preparing an IPO on Shanghai’s tech board.

Image credit: Donald Giannatti/Unsplash

Shanghai-headquartered semiconductor firm UNISOC, formerly Spreadtrum Semiconductor, raised CNY 2.25 billion (around USD 320 million) from the China National Integrated Circuit Industry Investment Fund, known as the ‘Big Fund,’ in its Series B on March 17.

Announced (in Chinese) earlier today by financial outlet Sina, the new funding round follows the rollout (in Chinese) of UNISOC T7520, the company’s debut mobile application System-on-a-Chip (SoC) processor with an integrated 5G modem. Remarkably, the chipmaker has been mainly involved in the production of low-end chipsets for affordable smartphones. For one, it inked a partnership with South African phone maker Mobicel in 2018. The two agreed to launch a new handset that will be manufactured and marketed locally.

The chipmaker has lately been active on a global scale, signing contracts with upstream and downstream partners, as well as various players in adjacent fields. In January 2019, it made a strategic deal with American test equipment giant Keysight (KEYS:NYSE). A few months later, it partnered with British Intellectual Property (IP) licensing firm Imagination (IMG:LSE) on brand-new neural network accelerator IMG Series3NX.

Founded in 2001, the company has grown into a 4,500-odd-people-large chipset developer, with over 90% of employees directly involved in the research and development process. It claims to have “15 R&D centers and seven customer support centers around the world.” The firm used to be listed on Nasdaq before Tsinghua Unigroup, a Chinese microelectronics-focused secretive asset management giant, bought the firm out at USD 1.78 billion.

In 2015, UNISOC received tens of millions of yuan from Intel Capital. Its venture capital adventures continued in May 2018, when Beijing government-backed ZGC Group (中关村发展) added at least CNY 100 million (USD 14.24 million) to the chipmaker’s ‘funding pool.’

As China is taking steps toward semiconductor self-reliance, investing lavishly in budding local chipmakers, the state regulators are striving to create new channels to public capital for high-tech-driven enterprises. One of the recent projects – the Shanghai bourse-based Star Market – helped a handful of companies in the space to boost their financial resources (check out our latest quarterly overview of the board).

UNISOC is reportedly (in Chinese) preparing a public offering in the new marketplace too. It has started an equity optimization project in conjunction with an organizational structure upgrade. The new generation of wireless technology (5G) infrastructure will present new opportunities for the company, which, as mentioned above, has already jumped on the bandwagon.

The lucrative Indian smartphone market is one of the company’s key targets. Indians and their tech-savvy consumer habits are shaping a battlefield where the Chinese challenger will try to take on its long-standing rivals – MediaTek (2454:TW) and Qualcomm (QCOM:NASDAQ). “They [UNISOC] are quite concerned about beating MediaTek,” an industry source commented to EqualOcean. “The two firms’ zones of interest have huge overlaps.”