China's 'Big Fund' is investing $1 billion in another domestic foundry, to advance sub-10nm chip manufacturing

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The investment is to help HLMC develop new process technologies.

www.tomshardware.com/, Dec. 06, 2023 – 

China-based chipmaker Shanghai Huali Microelectronics Corp. (HLMC), a part of the HuaHong Group, has obtained a $1 billion cash infusion from the China Integrated Circuit Industry Investment Fund, phase two – aka, the "Big Fund 2." This investment will help HLMC to keep developing newer process technologies and upgrade its manufacturing capabilities accordingly, reports DigiTimes. HLMC could become China's second chip manufacturer that's capable of producing chips using a sub-10nm-class fabrication process.

Unlike Semiconductor Manufacturing International Corp. (SMIC), which has historically been positioned as China's leading foundry and is meant to compete against TSMC, HLMC has kept a lower profile. Officially, the company can produce chips on 22nm- and 28nm-class fabrication technologies. But DigiTimes claims that HLMC started to make chips on a 14nm FinFET process nodes using deep ultraviolet (DUV) immersion lithography machines in 2020. Many DUV tools can be used to make chips on sub-10nm fabrication technology.

Since Chinese companies cannot obtain leading-edge chipmaking tools due to tensions between the U.S. and China, this has impacted HLMC's development strategy. The company has been working on improving its production nodes by using advanced methods like multi-patterning on DUV machines, and some believe that HLMC could indeed be capable of making sub-10nm chips. As a result, China's authorities remain optimistic about development of the country's semiconductor industry.

To help China achieve its goals, companies like HLMC are getting significant funding from the Big Fund 2. HLMC is apparently doing quite well, and support from the fund helped increase HLMC's registered capital from ¥22 billion ($3.078 billion) to ¥28.4 billion ($3.974 billion). Major stakeholders include Huahong Group (54% of shares) and other government-linked companies and funds (36% of shares). This influx of money shows the government's interest in making HLMC a major chipmaker akin to SMIC.

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