Despite U.S. chip sanctions on China throughout 2021, China’s chip companies — mostly startups — raised a record $10.8 billion in a booming market driven by a global chip shortage.
By comparison, chip startups around the globe raked in $19.4 billion in financing in 2021, according to The Register. EqualOcean, a Chinese tech information service provider, reported Wednesday that the total funds Chinese semiconductor firms raised in 2021 increased 40.7% from 2020. This means that each chip company in China raised an average of $38 million in financing in 2021.
All told, China’s semiconductor firms booked 287 deals in 2021, up 67.8% from 2020’s 171. And last year’s financing activities in China's semiconductor sector in 2021 primarily focused on chip manufacturing.
The largest funding round last year was a $1.5 billion investment in Chinese company Horizon Robotics, a provider of edge artificial intelligence.
Chinese tech companies rely heavily on foreign chips. Beijing has been trying to boost its domestic semiconductor industry for years, but it’s facing an uphill battle, especially in making advanced chips. Sanctions imposed by the U.S. government have greatly limited China's access to the latest manufacturers globally and U.S. technologies. So Beijing is doubling down on building up capacity to become more self-sufficient in chips.
The burgeoning demand for consumer electronics, combined with a government push for expansion of the Chinese semiconductor industry, have created lucrative opportunities for China’s chip manufacturing and design firms in the past few years.
Correction: An earlier version of this story misstated the year prior to the 40.7% increase in fundraising. This story was updated on March 2, 2022.
Climate TRACE's data show emissions at the facility-level.Image: Climate TRACE