Taiwan-based semiconductor producer MediaTek is set to invest RMB 300m ($48.8m) in the venture fund formed by Shanghai’s municipal government and China-based venture capital firm Summitview Capital.
The fund will initially have $488m of cash to invest in its first phase, before scaling up to a full size of approximately $1.6bn. It will back semiconductor technology companies that operate in China, even if they are not headquartered in the country.
Other investors include China-based semiconductor foundry SMIC, US-based financial services firm Knight Capital, Shanghai Jiading Venture Capital and Tsinghua Holdings, a fund related to Tsinghua University.
The establishment of the fund is part of a push to counter US-based Qualcomm’s domination of China’s mobile chipset market. Qualcomm’s Snapdragon line has around a two-thirds market share, with Mediatek the next biggest presence.
However, Mediatek’s participation may depend on consent from the Taiwanese government, which regulates investment by Taiwan-based semiconductor companies in mainland China.