Shanghai State-owned Investment Group made investments in three AI chip industry chain enterprises

Shanghai State-owned Capital Investment makes a move.

Recently, Shanghai State-owned Capital Investment Co., Ltd. (abbreviated as Shanghai State-owned Capital Investment) signed investment agreements with three semiconductor companies in one go, namely Xinyaohui, Enflame Technology, and Biren Technology.

Previously, news had already emerged that Shanghai State-owned Capital Investment's leading AI mother fund would lead the new financing round for Biren Technology prior to its IPO. Regarding these three investments, Shanghai State-owned Capital Investment told a reporter from the *China Science and Technology Innovation Board Daily* that as a state-owned investment platform serving Shanghai's scientific and technological innovation and industrial development, it aims at assets at the uppermost reaches of the industry chain, the pinnacle of the value chain, and the deepest levels of the technological system.

"In this process, we will actively deploy in sectors such as foundational models, computing chips, and embodied intelligence, with a focus on areas including corpus data, edge AI, AI for Science (AI4S), vertical models, and applications."

In addition to these three companies, data from CLS Venture Capital Link shows that Huahong Semiconductor, Bangxin Semiconductor, Jita Semiconductor, and ESWIN Silicon all have the presence of Shanghai State-owned Capital Investment-affiliated funds behind them.

As one of the most upstream segments in the development of the AI industry, computing chips hold a significant position, and semiconductor technology IP is a "key player" in this segment.

A reporter from the *China Science and Technology Innovation Board Daily* noted that among the aforementioned three companies, Enflame Technology and Biren Technology are both GPU chip design companies, while Xinyaohui is a semiconductor technology IP company.In April this year, the China Securities Regulatory Commission disclosed the report on the tutoring and filing for Xinyaohui's initial public offering and listing.

In response, a reporter from the *China Science and Technology Innovation Board Daily* attempted to contact Xinyaohui but had not received a reply as of press time.

In terms of business, IP licensing and comprehensive IP services are the core of Xinyaohui's operations.An investor revealed that Xinyaohui's technological approach is Chiplet.

This investor told a reporter from the *China Science and Technology Innovation Board Daily* that the mainstream approach in the market used to be SoC, which involves integrating all modules onto a single chip to enhance speed and reduce power consumption. However, this approach has three fatal drawbacks in advanced processes:

First, the cost of IP is high. The most advanced processes' low voltage is detrimental to the performance of many IPs, while also leading to a sharp increase in IP development costs.

Second, the SoC design cycle is too long.Many designs that originally only took 6 months may take 1.5 to 2 years, mostly due to PI (semiconductor material layer) reasons.

Third, the chip yield is too low. The large size of SoC may result in a chip yield rate below 50%. Therefore, the market hopes to address these shortcomings through chip interconnection while maintaining the performance and power consumption of SoC, leading to the emergence of Chiplet technology.

A reporter from the Science and Technology Innovation Board Daily noted that the company's founder, Zeng Keqiang, drove the transformation of the Xinyaohui IP2.0 strategy, deploying Chiplet technology to achieve breakthroughs in domestic high-speed interface IP, covering interface IP, controller IP, and basic IP.

According to his resume, Zeng Keqiang has over 20 years of experience in the semiconductor industry. He previously served as the Deputy General Manager of Synopsys China and held positions at ARM, Synopsys, Cadence, and Alphawave, which collectively accounted for 75% of the IP market share in 2024.

In terms of Xinyaohui's CEO and CTO, Tang Xiaoke previously served as the R&D Director of Beijing Zhixin Microelectronics Technology Co., Ltd., with extensive experience in R&D operations management. Li Mengzhang has served as the project leader for RF/analog chip design at Texas Instruments in the US, the Deputy Director of RF Chip R&D at MStar Semiconductor, and the Senior Vice President of ASIC at UNISOC.

The aforementioned investors believe that although domestic IP technology currently accounts for a relatively small share in the global market, there is a strong demand for domestic substitution. "Driven by the demand for AI and automotive electronics, the high-speed interface IP market is expected to grow at a compound annual growth rate (CAGR) exceeding 20% in the short term. In the long term, the widespread adoption of Chiplet technology will drive an increase in IP reuse rates and a deepening of localisation."