A STOCK MARKET DARLING
The question is how. Beijing has tried for years to fund tech advancement and foster national champions.
But past practices have led to waste, debt accumulation and scandals. The bankruptcy of Tsinghua Unigroup in 2021, the closest thing China had to Samsung Electronics, and the subsequent corruption investigation at the China Integrated Circuit Industry Investment Fund, known as the “Big Fund,” come to mind.
These past failures only make the AI chip designer Cambricon Technologies’ success all the more heartening. Founded in 2016, it went public four years later on the Shanghai Stock Exchange STAR board, a pilot programme championed by President Xi Jinping to speed up the listing process of tech startups.
Cambricon has become a stock market darling, precisely because investors recognise China has a good chance to take market share in inference chips. As a result, the company can rely on stock sales to finance future R&D spending. It recently announced a plan to raise nearly 4 billion yuan (US$560 million) for AI chip and software development. Despite a sharp jump in sales, the young startup is still burning cash.
In retrospect, fundraising via the stock market is a lot simpler than the labyrinth of financial support privately-held Unigroup received from various state backers, including the Big Fund. It was never clear who was really in charge and which entity would ultimately pick up the hefty bill of building next-generation memory chip plants. It’s no surprise that Unigroup went bust.
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