JunHe, a prominent legal firm, has played a pivotal role in the establishment of the third phase of the China Integrated Circuit Industry Investment Fund, marking a significant milestone in the country’s semiconductor industry. The fund, which has garnered a staggering RMB344 billion (USD47.5 billion), stands as the largest of its kind in China to date.
This latest phase of the fund dwarfs its predecessors, combining the amounts raised in the first and second phases with RMB138.7 billion and RMB204.2 billion respectively. Surpassing even the monumental China Structural Reform Fund, valued at RMB350 billion, this third phase underscores the nation’s unwavering commitment to fostering semiconductor development.
Under the leadership of partners Wei Yingling, Shelley Wang, and Kevin Cui, JunHe assumed the role of sole legal advisor throughout the fund’s establishment process. Notably, the firm has been instrumental in advising on the inception of the initial and subsequent phases of the “big fund” since 2016.
The genesis of the “big fund” dates back to 2014 when the State Council proposed its establishment, aiming to catalyze the growth of the chip industry through capital infusion.
The Ministry of Finance emerges as the principal stakeholder in the third phase, contributing approximately RMB60 billion for a substantial 17.44% share. Additionally, China Development Bank Capital injected RMB36.1 billion, securing a 10.5% stake, while Shanghai Guosheng Group holds an 8.7% share after investing RMB30 billion.
Notably, the third phase of the “big fund” witnessed unprecedented participation from six state-owned banks, namely the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, and the Postal Savings Bank of China. Together, these banks collectively injected RMB114 billion into the fund, commanding a combined 33.14% ownership.
In a significant development, all 19 shareholders, including the aforementioned banks, have inked an agreement to invest in the third phase of the fund. This move follows approval from the National Financial Regulatory Administration, signaling robust support from regulatory authorities.
The overarching objective of this state-backed initiative is aligned with China’s strategic ambition to achieve self-sufficiency in semiconductor production, reflecting the nation’s broader agenda of technological advancement and innovation.
