Eswin Computing Lands $283 Million Round as China Looks to Fill Flailing Chip Market

Eswin lands its Series B, while SMIC continues to raise funds for 14nm wafer production and TSMC chooses U.S. over Huawei, though posing some audacious demands.

Anna Vodopyanova
    Jun 09, 2020 1:45 PM  PT
Eswin Computing Lands $283 Million Round as China Looks to Fill Flailing Chip Market
author: Anna Vodopyanova   

Beijing Eswin Computing Technology Co. Ltd. has just raised $283 million in a Series B fundraising to advance China's chip industry in light of the tech war with Washington.

While China's semiconductor technology is far behind the world's top foundries like Taiwan Semiconductor Manufacturing Co. (NYSE: TSM; TWSE: 2330), it is doing its best to catch up and raising massive funding while at it.

Four-year-old Eswin Computing is playing on China's demand for domestic chips and has attracted Legeng Capital, operated by computer giant Lenovo, as well as IDG Capital, Riverhead Capital Investment Management, and Lighthouse Capital to this round. It was also boosted by government backing from Haining City and Zhejiang Province, according to various sources.

Eswin provides IC application solutions in mobile devices, smart homes, smart transportation, industrial IoT, produces 12-inch monocrystalline silicon polished wafers and epitaxial wafers, and delivers rear-end IC packaging and testing services, according to its website. It operates R&D centers in China, the U.K., and South Korea, and has production facilities in Xi'an, Chengdu, Hefei and Suzhou. It also has marketing branches in Silicon Valley and Hong Kong, among others, its website says.

The semiconductor arm is headed by chairman Dongsheng Wang, who has recently stepped down as chairman of Shenzhen-listed Chinese tech giant BOE Technology Group – which owns a stake in Eswin's chip production, according to Caixin Global.

Meanwhile, China's biggest foundry, Semiconductor Manufacturing International Corp. (SMIC), which a year ago voluntarily delisted from the NYSE after the U.S. President Donald Trump intensified with the bullying of Chinese techs, is planning a 20 billion yuan ($2.86 billion) listing on Shanghai's high-tech STAR Market.

Currently listed in Hong Kong, SMIC said it plans to use the capital for 14-nanometer chip manufacturing. Last month, the company said it began producing chips for Huawei Technologies, blacklisted by the United States. Also in May, SMIC landed $2.5 billion in new capital from state funds to ramp up chip production.

This comes as TSMC, building a $12 billion plant in Arizona for 5nm chips, is reportedly seeking huge subsidies from Washington. Reuters reported, citing a statement by company chairman Mark Liu, that the chip giant hopes the U.S. will cover the difference in operating costs between Taiwan and the U.S.

Washington's response may decide the fate of China's smartphone giant Huawei. TSMC's working with the U.S. has signified that the giant is also turning its back on Huawei and will stop taking its orders. At an annual general meeting, Liu said that he does not expect the trade ban with Huawei to significantly weigh on its business. He said he hopes other contracts will fill the gap.

Meanwhile, U.S. research firm IC Insights questions China's ability to reach its goal of supplying 70% of is market with domestic chips according to its Made in China 2025 initiative. In a May 21 report, the firm estimated China will reach just one-third of its target in five years.