logo
SiCarrier-Huawei partner in chips seeks $2.8 billion in funds, sources say

SiCarrier-Huawei partner in chips seeks $2.8 billion in funds, sources say

Economic Times14-05-2025

SiCarrier, a Chinese chip equipment maker with close links to Huawei, is seeking $2.8 billion in its maiden fundraising round, two people familiar with the plans said, as the startup chases more clients and clout.
SiCarrier was until recently little known, but it has become the most talked-about company in Chinese semiconductor circles this year as the breadth of its planned product range and ambitions emerges.
Founded in 2021 and owned by the Shenzhen city government, SiCarrier is largely seen as a Huawei supplier. But it wants to become the leading domestic provider of chipmaking equipment in China, surpassing Naura and Advanced Micro-Fabrication Equipment China (AMEC), according to four people with knowledge of its goals.
It is a prime example of how US restrictions on exports of chipmaking gear and advanced semiconductors to China, while curbing tech progress in the world's second-largest economy in some ways, have spurred Chinese firms to take up President Xi Jinping's call to evolve into a self-sufficient domestic chip industry. The government of Shenzhen, a tech metropolis in southern China, is looking to sell roughly 25% of a SiCarrier unit and is after an 80 billion yuan ($11 billion) valuation, said one of the sources, adding the fundraising could conclude in the coming weeks.
The source also said the unit does not include SiCarrier's lithography assets. Reuters was not able to learn the name of the unit.
The proceeds will mostly go towards research, and Chinese state-owned firms, state funds, as well as domestic venture capital and private equity funds have expressed interest in investing, said two sources. It will likely be one of the largest yuan-denominated fundraisings by a Chinese company this year. Reuters spoke to 10 people with knowledge of SiCarrier's business for this article. All declined to be identified as the company has not publicly disclosed its plans. SiCarrier, which was slapped with U.S. export controls late last year due to its close ties to Huawei, did not respond to requests for comment. Huawei said it was not affiliated with SiCarrier. The Shenzhen government also did not respond to requests for comment.
Big splash SiCarrier spent its initial years largely silent about its plans but made a splash at this year's Semicon China trade fair in March, drawing large crowds with a catalogue of 30 machines ranging from etching tools to inspection equipment named after Chinese mountains. Its lithography systems were, however, not on display. While executives at the time did not go into detail about the readiness of its products, two sources said most of SiCarrier's line-up is still under development and is not production-ready. Chipmaking equipment usually undergoes long testing and validation processes before being adopted by customers. "Considering the brief period since their establishment, it seems nearly impossible for them to have developed such complex machinery and completed the extensive verification process required," Bernstein analysts also wrote in a March client note. Even if SiCarrier makes rapid progress over the next couple of years, it is likely to take far longer before Chinese chip equipment providers make a serious dent in foreign dominance of the field. Last year, domestically made wafer fabrication equipment accounted for just 11.3% of total purchases by China, according to data from consultancy TechInsights. China has spent $128 billion on such equipment since 2020, when the U.S. started curbing chip sector exports, the data shows.
Lofty ambitions A Reuters review of 92 Chinese patents filed by Shenzhen SiCarrier Industry Machines and its parent company Shenzhen SiCarrier Technologies between October 2022 and March this year shows the group wants to be a one-stop shop for all equipment to make a chip, preparing a far more ambitious product line-up than Naura or AMEC. The patents, searched with U.S. firm Anaqua's AcclaimIP database and verified by Reuters, range from wafer measurement devices to etching systems to deposition systems that layer thin films on wafers to give them electrical characteristics. That puts SiCarrier into competition with firms such as KLA, Lam Research from the U.S. and Tokyo Electron. SiCarrier is also investing in AI-driven wafer defect recognition, cutting-edge tech that aims to improve chip yields. Measurement and inspection tools hold the most potential for SiCarrier to make its mark because no dominant player in these areas has emerged in China, according to two of the sources. Other patents include components for deep ultraviolet technology (DUV) lithography systems and multi-patterning chip-making techniques that SiCarrier has touted as a solution to solving China's lack of access to top-end extreme ultraviolet (EUV) lithography tools. But multi-patterning, which replaces optical lithography with various atomic-layer etching and deposition steps, has its sceptics. The technique, introduced by U.S. chip giant Intel in the 2010s and used by Taiwan's TSMC for its first generation of 7-nanometre chips, is prone to errors and lower yields due to increased manufacturing steps, according to Dan Hutcheson, vice chair at TechInsights.
Wary of Huawei links According to industry executives, SiCarrier was formed out of a Huawei unit that made semiconductor tools. And while some Chinese foundries have purchased SiCarrier equipment to show support for the government venture, there has also been reluctance to use the products due to concerns that trade secrets could be leaked to Huawei, three of the sources said. Chip equipment manufacturers work closely with foundries to test, validate and improve their products, and customer reticence could impede how quickly SiCarrier makes progress. The companies' ties run deep with Huawei seconding several staff members to SiCarrier from its HiSilicon chip design unit, according to one source. "The biggest problem is not the product, but that when customers use its equipment, Huawei might know their process parameters," said another source. "If it wants to grow big, it needs to separate from Huawei completely, but even so, it will still take several years to validate and iterate the products."

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Auto companies 'in full panic' over rare-earths bottleneck
Auto companies 'in full panic' over rare-earths bottleneck

Time of India

time11 minutes ago

  • Time of India

Auto companies 'in full panic' over rare-earths bottleneck

Frank Eckard, CEO of a German magnet maker, has been fielding a flood of calls in recent weeks. Exasperated automakers and parts suppliers have been desperate to find alternative sources of magnets, which are in short supply due to Chinese export curbs. Some told Eckard their factories could be idled by mid-July without backup magnet supplies. "The whole car industry is in full panic," said Eckard, CEO of Magnosphere, based in Troisdorf, Germany. "They are willing to pay any price." Car executives have once again been driven into their war rooms, concerned that China's tight export controls on rare-earth magnets - crucially needed to make cars - could cripple production. U.S. President Donald Trump said Friday that Chinese President Xi Jinping agreed to let rare earths minerals and magnets flow to the United States. A U.S. trade team is scheduled to meet Chinese counterparts for talks in London on Monday. The industry worries that the rare-earths situation could cascade into the third massive supply chain shock in five years. A semiconductor shortage wiped away millions of cars from automakers' production plans, from roughly 2021 to 2023. Before that, the coronavirus pandemic in 2020 shut factories for weeks. Those crises prompted the industry to fortify supply chain strategies. Executives have prioritized backup supplies for key components and reexamined the use of just-in-time inventories, which save money but can leave them without stockpiles when a crisis unfurls. Judging from Eckard's inbound calls, though, "nobody has learned from the past," he said. This time, as the rare-earths bottleneck tightens, the industry has few good options, given the extent to which China dominates the market. The fate of automakers' assembly lines has been left to a small team of Chinese bureaucrats as it reviews hundreds of applications for export permits. Several European auto-supplier plants have already shut down, with more outages coming, said the region's auto supplier association, CLEPA. "Sooner or later, this will confront everyone," said CLEPA Secretary-General Benjamin Krieger. Cars today use rare-earths-based motors in dozens of components - side mirrors, stereo speakers, oil pumps, windshield wipers, and sensors for fuel leakage and braking sensors. China controls up to 70% of global rare-earths mining, 85% of refining capacity and about 90% of rare-earths metal alloy and magnet production, consultancy AlixPartners said. The average electric vehicle uses about .5 kg (just over 1 pound) of rare earths elements, and a fossil-fuel car uses just half that, according to the International Energy Agency. China has clamped down before, including in a 2010 dispute with Japan, during which it curbed rare-earths exports. Japan had to find alternative suppliers, and by 2018, China accounted for only 58% of its rare earth imports. "China has had a rare-earth card to play whenever they wanted to," said Mark Smith, CEO of mining company NioCorp, which is developing a rare-earth project in Nebraska scheduled to start production within three years. Across the industry, automakers have been trying to wean off China for rare-earth magnets, or even develop magnets that do not need those elements. But most efforts are years away from the scale needed. "It's really about identifying ... and finding alternative solutions" outside China, Joseph Palmieri, head of supply chain management at supplier Aptiv, said at a conference in Detroit last week. Automakers including General Motors and BMW and major suppliers such as ZF and BorgWarner are working on motors with low-to-zero rare-earth content, but few have managed to scale production enough to cut costs. The EU has launched initiatives including the Critical Raw Materials Act to boost European rare-earth sources. But it has not moved fast enough, said Noah Barkin, a senior advisor at Rhodium Group, a China-focused U.S. think tank. Even players that have developed marketable products struggle to compete with Chinese producers on price. David Bender, co-head of German metal specialist Heraeus' magnet recycling business, said it is only operating at 1% capacity and will have to close next year if sales do not increase. Minneapolis-based Niron has developed rare-earth free magnets and has raised more than $250 million from investors including GM, Stellantis and auto supplier Magna. "We've seen a step change in interest from investors and customers" since China's export controls took effect, CEO Jonathan Rowntree said. It is planning a $1 billion plant scheduled to start production in 2029. England-based Warwick Acoustics has developed rare-earth-free speakers expected to appear in a luxury car later this year. CEO Mike Grant said the company has been in talks with another dozen automakers, although the speakers are not expected to be available in mainstream models for about five years. As auto companies scout longer-term solutions, they are left scrambling to avert imminent factory shutdowns. Automakers must figure out which of their suppliers - and smaller ones a few links up the supply chain - need export permits. Mercedes-Benz, for example, is talking to suppliers about building rare-earth stockpiles. Analysts said the constraints could force automakers to make cars without certain parts and park them until they become available, as GM and others did during the semiconductor crisis. Automakers' reliance on China does not end with rare earth elements. A 2024 European Commission report said China controls more than 50% of global supply of 19 key raw materials, including manganese, graphite and aluminum. Andy Leyland, co-founder of supply chain specialist SC Insights, said any of those elements could be used as leverage by China. "This just is a warning shot," he said.

UK to end ban on retail investors buying crypto exchange-traded notes
UK to end ban on retail investors buying crypto exchange-traded notes

Mint

time14 minutes ago

  • Mint

UK to end ban on retail investors buying crypto exchange-traded notes

(Refiles to remove extraneous word in the headline; no change to text) LONDON (Reuters) -Britain's financial regulator is to remove a ban on consumers buying crypto exchange-traded notes (ETNs), ditching its previous position of wanting to keep them out of the hands of retail investors. The Financial Conduct Authority said on Friday that allowing retail investors to buy ETNs would support growth and competitiveness, in the latest sign that the UK is shifting its approach to crypto as the government seeks to grow the economy and support a digital assets industry. Last year the FCA had approved the launch of crypto ETNs for professional traders but banned retail investors from access, calling the products "ill-suited" because of "the harm they pose". "We want to rebalance our approach to risk and lifting the ban would allow people to make the choice on whether such a high-risk investment is right for them given they could lose all their money," David Geale, executive director of payments and digital assets at the FCA, said in a statement on Friday. The proposal will now go out for consultation. Britain in April published draft laws for bringing cryptocurrencies under compulsory regulation for the first time, aligning it with the United States' approach, rather than the European Union, which has built rules tailored to the industry. To be sold to individual consumers, the ETNs will need to be traded on an FCA-approved investment exchange, the regulator said. A ban on retail investors trading cryptoasset derivatives would remain, the watchdog added. (Reporting by Tommy Reggiori Wilkes. Editing by Jane Merriman)

Sri Lanka, China ink MoUs to boost trade partnership
Sri Lanka, China ink MoUs to boost trade partnership

The Hindu

time22 minutes ago

  • The Hindu

Sri Lanka, China ink MoUs to boost trade partnership

Sri Lanka and China have signed two Memoranda of Understanding to set up a working group on trade facilitation, and on industrial and supply chain cooperation, the Chinese Embassy in Colombo said. 'China and Sri Lanka have taken steps to deepen economic and trade cooperation, signing key agreements and exploring additional investment opportunities during the eighth meeting of the China-Sri Lanka Joint Trade and Economic Commission held on May 29th in Colombo,' the Embassy said on social media platform 'X' on Sunday. The meeting was jointly chaired by China's Commerce Minister Wang Wentao and Sri Lankan Minister of Trade, Commerce, Food Security and Co-operative Development Wasantha Samarasinghe. 'Both sides exchanged in-depth views on advancing high-quality Belt and Road Initiative cooperation, expanding trade and investment, and safeguarding the multilateral trading system,' the Chinese Embassy's post said. Minister Wang also met President Dissanayake during his visit. According a statement issued by the President's office, Minister Wang noted that considering 'the current political and economic stability in Sri Lanka, along with the clear policy direction' of the Dissanayake administration, 'there has been a notable rise in interest from Chinese investors looking to invest in the country.' 'We discussed enhancing our trade relations and expediting development projects in Sri Lanka. Exciting times ahead with increased interest from Chinese investors,' Mr. Dissanayake said on social platform 'X' following the meeting. The bilateral initiatives take off from deliberations held during President Anura Kumara Dissanayake's visit to China in January this year, soon after he visited India in December 2024, making New Delhi his first stop abroad after assuming office in September 2024. A joint statement issued on Mr. Dissanayake's China visit said the two sides agreed to work on the 'early conclusion of a comprehensive free trade agreement.' Speaking at an investors' forum in Colombo during his visit Mr. Wang, according to local publication Economynext, said: 'It is hoped that the two sides continue to work toward the conclusion of a comprehensive free trade agreement in one package, in line with the principles of equality, mutual benefit.' New Delhi and Beijing are keen to cultivate close ties with the leftist Sri Lankan leader, who has repeatedly emphasised a non-aligned foreign policy that would prioritise Sri Lanka's interests. India and sections within Sri Lanka have been highlighting the need to resume bilateral talks on Economic and Technological Cooperation Agreement (ETCA) — stalled at different points — especially in the context of U.S. President Donald Trump's decision to slap tariffs on trade partners. During Prime Minister Narendra Modi's visit to Sri Lanka in April 2025, the two sides inked seven MoUs, including one on defence cooperation. Last month, Sri Lanka's Cabinet approved a proposal for a Memorandum of Understanding (MoU) between China's Chongqing Transmission Corporation Limited and the state-run Rupavahini Corporation to 'promote mutual understanding, strengthen cooperation, and exchange training opportunities in the field of media'.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store