TCL Set Up Chips Unit To Invest In ICs; China National Semiconductor Fund Starts Deploying RMB200 Billion

TCL Technology (000100.SZ) has established a semiconductor business department to look for investment opportunities in the integrated circuit industry, said Li Dongsheng, the founder of TCL.

Li Dongsheng said that TCL Technology is ready to look for opportunities in three areas in the semiconductor field.

The first is semiconductor power devices. Most of the manufacturing industry, including new energy vehicles, involves semiconductor power devices. The market demand for this industry is growing steadily. TCL plans to expand the production capacity of semiconductor power devices and upgrade technology to strive for breakthroughs in this field.

The second is integrated circuit design. TCL will seek breakthroughs in the three areas of smart terminals, semiconductor displays and materials, and new energy.

In addition, TCL Technology will also take advantage of the company’s capital platform, including through its semiconductor industry investment funds, to seek investment opportunities in the integrated circuit industry, exerting industrial synergies and enhancing competitiveness.

Li also said that he plans to submit proposals to the National "Two Sessions" in March to accelerate the development of the new display industry. The overall annual output value of China’s new display industry has exceeded 400 billion yuan, and the industrial scale of liquid crystal display panels has ranked first in the world.

However, in terms of new display technology, it takes effort to improve on technology. Among them, the key is to strengthen the supporting capabilities of the industrial chain and make breakthroughs in core materials and core equipment.

At present, some core materials and many core equipment in the sector have to rely on imports. In the future, Li hopes to accelerate the development of some core materials in China and accelerate the cultivation of a batch of core equipment industries.

Li Dongsheng said that the equipment required for the new display is highly correlated and similar to integrated circuit equipment.

Last year, TCL Huaxing, a subsidiary of TCL Technology, acquired Suzhou Samsung’s LCD panel factory and supporting module factory. Li Dongsheng revealed that the transaction is expected to be completed in March.

TCL is one of many Chinese companies that have moved into the semiconductor industry including Xiaomi, OPPO, Alibaba, Baidu, Geely Auto, and NIO.

China National Integrated Circuit Industry Investment Fund fund also recently revealed that its second phase fund with 200 billion yuan has entered the investment stage.

And on March 2, at a press conference held by the Information Office of the State Council, Zhao Huan, chairman of the China Development Bank, said in response to a reporter’s question that the 200 billion yuan raised by the second phase of the National Semiconductor Fund has fully entered the investment stage.

The fund was established in October 2019, has reached 204.15 billion yuan raised for its second phase and has invested more than 30 billion yuan. It has invested in Shanghai Ruili, Guangzhou Xingke (Xingsen Technology Subsidiary), Tai Ling Micro, Ziguang Zhanrui, SMIC Southern (a subsidiary of SMIC) and other projects.

Since late December 2019, the first phase of the Fund has launched a reduction plan in the A-share market, reducing its stakes in a number of listed companies in the semiconductor industry chain. In 2020, it has already reduced their holdings and cashed out by about 9 billion yuan, including selling stakes in Zhaoyi Innovation, packaging and testing leader Jingfang Technology, and semiconductor materials leader Anji Technology.

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