Hong Kong-based investment firm China Everbright Ltd. and American venture capital company Walden International Group are jointly launching a US$500 million fund focused on the semiconductor and industrial information technology sectors.
The Walden CEL Global Fund I will target investments in enterprises along the semiconductor and electronic information supply chain, including but not limited to microchips, artificial intelligence, as well as hardware and software integration, according to an announcement.
In addition, the fund will seek to create synergies by importing proven technology and business models from Walden’s portfolio companies into the Chinese market and augment China Everbright’s project sources in mainland China. The fund’s long-term aim will be to assist in the technological improvement and development of China’s semiconductor industry.
The total market revenue of the global semiconductor industry reached USD338.9 billion in 2016, of which China accounted for US$150 billion. Currently American and European companies are dominant in the core processes of chip design, but the processes for heavy asset manufacturing, equipment for upstream and downstream industrial chains, and packaging testing are increasingly relocating to Asia and especially China, according to the Semiconductor Industry Association.
China has been aggressively developing the semiconductor industry since 2014, when the State Council issued a policy aiming to achieve a 20% growth rate for the sector in terms of the sales by 2020.
China Everbright was established in 1997 under the state-owned enterprise China Everbright Group. It is China’s leading cross-border investment and asset management company. As of the end of June 2017, the company managed 38 funds and completed fundraising efforts worth HK$ 106.6 billion (US$13.6 billion).
Founded in 1987, Walden, has cumulative capital commitments of US$2.6 billion. Its portfolio companies include Chinese drone maker Dajiang Innovations Science and Technology Co., Ltd., Best Logistics and cloud intelligence firm CloudMinds.