SummitView Capital raises $1.7B private equity fund with Shanghai government for chip investments

SummitView Capital has raised a $1.7 billion private equity fund with the Shanghai government to invest in chip companies that do business in China.

The whopping fund shows China’s commitment to the semiconductor design and manufacturing market, as well as the rising cost of place bets in the chip business.

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San Francisco-based SummitView said the new ¥10 billion RMB ($1.7 billion USD) fund is part of a strategic collaboration with the Shanghai government and the China National Fund. The signing ceremony took place on Monday and was chaired by Shanghai’s vice mayor, Ai Baojun, and the vice secretary of the Shanghai government, Dai Haibo.

The fund will focus on global chip design companies and help them expand their market share in China by increasing sales, marketing activities, support, and engineering. The recipients of funding don’t have to be based in China.

SummitView Capital has also signed agreements with China Development Bank, Bank of Shanghai, Shanghai Pudong Development Bank, China Merchant Bank, and Bank of China to secure debt financing for its operations of ¥30 billion ($5 billion USD).

The fund is headquartered in Shanghai with offices in Beijing and San Francisco. Investors in the fund include the Shanghai Science & Technology Investment Corporation, Shanghai Jiading Investment Management Corporation, Semiconductor Manufacturing International Corporation (SMIC), MediaTek Corporation, and Tsinghua Holdings.