According to SiEngine, the sum it raised is the most money ever invested in the domestic automotive chip design industry in the first half of this year.
The start-up was created in 2018 as a joint venture between Arm China and EcarX, a provider of smart vehicle technology.
The fabless semiconductor company SiEngine Technology Co. reported on Tuesday that its Series A financing round included nearly 1 billion yuan (US$148 million) from investors led by Sequoia Capital China. SiEngine Technology Co. is a start-up that specialises in cutting-edge automotive system-on-a-chip designs.
According to a statement published by SiEngine on its official WeChat account, Tony Xiang Xiaoxiao, a managing director at Sequoia Capital China, “There is huge long-term potential in intelligent car production.” Additionally, Xiang stated that the venture capital firm will assist SiEngine in growing its business in the autonomous driving, intelligent vehicle, and other industrial sectors.
According to SiEngine, the amount it raised was the largest funding amount ever seen in the domestic automotive chip design industry in the first half of this year. Other Series A investors in the company include the Chinese software company Neusoft, the venture capital arm of engineering company Robert Bosch, Boyuan Capital, and China Fortune-Tech Capital, a Shanghai-based investment company founded by Semiconductor Manufacturing International Corp.
In 2018, the smart car technology company EcarX and Arm China formed the joint venture SiEngine, which is headquartered in Wuhan, the provincial capital of central Hubei. Chinese billionaire Li Shufu, who is also the founder and chairman of Zhejiang Geely Holding Group, founded EcarX, which is supported by the Chinese automaker Geely Auto.
The latest funding round for SiEngine will be used to fund new product development, supply of current products, and the introduction of high-performance automotive chips.
The start-up, which unveiled its first intelligent console chip with a 7-nanometer pitch in December of last year, predicted that mass production of these gadgets would begin in the second half of this year.
As domestic manufacturing supply chain disruptions brought on by strict Covid-19 control measures have subsided, venture capitalists’ renewed optimism in China’s semiconductor self-sufficiency drive is reflected in SiEngine’s successful fundraising.
Due to the ongoing global shortage of semiconductors, Chinese automakers have also been rushing to adopt more locally designed and produced chips.
However, major foreign manufacturers still control the majority of the automotive chip market. Examples include the Dutch company NXP Semiconductors, the Japanese company Renesas Electronics Corp., and the Intel Corp. subsidiary Mobileye..In a recent report, Caixin Media cited data from semiconductor research company IC Insights to claim that 90% of automotive chips used in mainland China, the world’s largest car market since 2009, are imported.
Mainland The vast talent gap between China’s semiconductor industry and markets like the US, Japan, and even Taiwan needs to be closed as well.
Chinese internet company founders are renowned for starting their companies when they were young, including Jack Ma of Alibaba Group Holding and Zhang Yiming of ByteDance. The South China Morning Post is owned by Alibaba.
Contrarily, in order to successfully run their own businesses, the majority of the founders and top executives of Chinese start-ups that produce automotive chips must first gain years of experience in the semiconductor sector. This illustrates how crucial it is for China’s semiconductor industry to develop more homegrown talent.
Wang Kai, the chief executive of SiEngine, has experience working for a number of renowned companies. These included the US company Freescale Semiconductor, which joined NXP in 2015, and Huaxintong Semiconductor Technologies Co., a joint venture between Qualcomm and the administration of the southwest Guizhou province.
According to a report created by the China Semiconductor Industry Association and the Human Resources Association of the Semiconductor Industry, the mainland would experience a talent shortage of 200,000 individuals in the years 2022–2023 as a result of the industry’s predicted increase in demand to 760,000 individuals.