China’s state semiconductor fund trims holdings in SMIC as Beijing focuses on next wave of development
- Analysts described the cash-out as a normal move based on the fund’s investment horizon
- Phase II of the fund continues to invest in asset-heavy chip manufacturing
China’s national semiconductor fund has trimmed its holdings in the country’s biggest chip maker, cashing out from earlier investments, as Beijing makes tactical adjustments to support the country’s semiconductor firms.
The China National Integrated Circuit Industry Investment Fund, initiated by the central government in 2014 with a registered capital of US$15.5 billion, sold 45 million shares of Semiconductor Manufacturing International Corporation (SMIC) last Friday at HK$26.2 per share and another block of 55 million shares at HK$25.6 per share on Monday, bagging roughly HK$2.6 billion in total from its investment in China’s leading foundry, according to corporate filings released on Thursday at the Hong Kong stock exchange.
The fund retains an 8.93 per cent stake in SMIC after the sales.
The fund also sold 4.17 million shares in Shanghai-listed IC design firm GigaDevice Semiconductor (GD), representing 1 per cent of the company’s total equity base, according to a GD stock filing. GD, backed by Singapore sovereign wealth fund GIC, designs memory and micro-controller chips.
An executive at GD, who declined to be named as he is not authorised to speak to the media, said the divestment does not mean that the fund has turned bearish on the company. “Given the Fund’s special status, its investment decisions have more connection to promoting the entire sector as per the country’s strategic development plan,” he added.
Meanwhile in China’s onshore stock market, the fund – known in the industry as the Big Fund – has been trimming its stake in Hangzhou Changchuan Technology Ltd, a semiconductor test equipment maker, and chip packaging firm China Wafer Level CSP Co, according to corporate announcements.