In-Depth Analysis of the Impact of Guangzhou's Integrated Circuit Industry Policies on Semiconductor Investment Opportunities

Based on the collected information, I now present a systematic and comprehensive analysis report for you.

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Guangzhou is building a multi-tiered, systematic integrated circuit industry policy system. At the municipal level, the Draft for Comments on Several Policies of Guangzhou for Promoting the High-Quality Development of the Integrated Circuit Industry Through the Entire Chain During the 15th Five-Year Plan Period proposes seeking support from national and provincial integrated circuit industry development funds for major projects, encouraging financial institutions to support project construction and enterprise operations, supporting enterprises in listing and financing, and guiding social capital to participate in mergers, acquisitions, restructuring, and technological transformation[1]. This policy framework reflects the industrial development concept that combines government guidance and market-driven forces.

From the perspective of policy evolution, Guangzhou has formed a full-industry-chain policy support system covering design, manufacturing, packaging and testing, materials, equipment, and components. The Several Measures of Guangzhou for Focusing on the High-Quality Development of the Specialty Process Semiconductor Industry issued in 2024 provides key support for specialty process fields such as analog chips, intelligent sensors, and wide-bandgap semiconductors[2]. The Several Policy Measures for Supporting the High-Quality Development of the Integrated Circuit Industry issued by Guangzhou Development Zone and Huangpu District includes 10 articles covering core areas such as promoting industrial agglomeration, enhancing high-end chip design capabilities, supporting localized replacement of core design tools, accelerating the improvement of manufacturing capacity, promoting the strengthening and supplementation of the industrial chain for materials, equipment, and components, developing advanced packaging and testing processes, enhancing industrial innovation levels, promoting integrated industrial development, and strengthening factor support guarantees[3].

Guangzhou has clearly put forward the strategic goal of building the core bearing zone for the ‘third pole’ of national integrated circuit industry development, and has constructed an industrial spatial layout of ‘one core, two poles, multiple points’[4]. As the core area, Huangpu District plans to build a 13.2-square-kilometer Bay Area Integrated Circuit Industrial Park, forming a layout of ‘10,000-mu Chip Park, One Center, Three Parks’. It has gathered more than 150 integrated circuit enterprises, accounting for nearly 90% of the total in Guangzhou, and the full industry chain integrating ‘chip design – wafer manufacturing – packaging and testing – equipment, materials and components – terminal applications’ is increasingly improving[5]. Nansha District focuses on new energy vehicle application-driven development and the characteristic direction of wide-bandgap semiconductors to build a full-industry-chain integrated development layout; Zengcheng District focuses on the fields of intelligent sensors and specialty process chip manufacturing to build an intelligent sensor industrial park[6].

In the ‘12218’ modern industrial system, semiconductors and integrated circuits are listed as ‘strategic leading industries’, enjoying broad development prospects, forward-looking strategic layout, and strong financial support[7]. In the first half of 2025, the added value of Guangzhou’s integrated circuit manufacturing industry increased by 30.0%, and the output of analog chips increased by 19.5%; from January to July, the industrial added value of the integrated circuit manufacturing industry reached 32.3%, and the output of integrated circuit wafers and analog chips increased by 53.9% and 18.9% respectively, showing a high-speed expansion trend of the industry[8].

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The National Integrated Circuit Industry Investment Fund Phase III (Big Fund Phase III) was officially established on May 24, 2024, with a registered capital of RMB 344 billion, setting a new record for the scale of global semiconductor special funds, surpassing the total of the previous two phases[9]. Its shareholders include 19 institutions such as the Ministry of Finance (investing RMB 60 billion, holding 17.44% shares), CDB Financial (RMB 36 billion), six major state-owned banks (a total of RMB 114 billion, accounting for 33%), Shanghai Guosheng, and China National Tobacco. For the first time, commercial bank capital was introduced, forming a synergistic effect of ‘financial guidance + financial empowerment’[10]. The fund’s term lasts until 2039, adopting a 15-year long-term operation model, which is 5 years longer than the previous two phases, matching the long-cycle characteristics of semiconductor technology iteration.

The investment logic of Big Fund Phase III focuses on ‘bottleneck’ links and cutting-edge technologies. In the manufacturing sector, it focuses on investing in leading enterprises such as SMIC and ChangXin Memory Technologies; in the equipment sector, it focuses on key equipment enterprises such as NAURA, AMEC, and Tuojing Technology; in the materials sector, it lays out photoresist and electronic special gas enterprises such as Nata Opto-electronic Material, Shanghai Newyang, and Tonking New Materials; in the advanced packaging sector, it pays attention to packaging and testing leaders such as Jiangsu Changjiang Electronics Technology (JCET) and Tongfu Microelectronics[11]. Through the sub-fund model (Huaxin Dingxin with RMB 93 billion focusing on materials and design, SDIC Jixin with RMB 71 billion specializing in equipment), Big Fund Phase III is expected to leverage over RMB 1.5 trillion in social capital[12].

The launch of the National Venture Capital Guidance Fund has brought new funding sources for the integrated circuit industry. The first batch of three regional funds covering the Beijing-Tianjin-Hebei region, Yangtze River Delta, and Guangdong-Hong Kong-Macao Greater Bay Area were established simultaneously, targeting a trillion-yuan scale[13]. The Guangdong-Hong Kong-Macao Greater Bay Area Venture Capital Guidance Fund has completed industrial and commercial registration. In the future, the total scale of each of the three regional funds will exceed RMB 50 billion, and the first batch of three regional funds has signed investment intentions with 49 sub-funds and 27 direct investment projects[14]. The guidance fund is guided by ‘invest early, invest small, invest long-term, invest in hard technology’, increasing support for proposed early-stage projects and seed enterprises, focusing on early-stage projects in fields such as integrated circuits, artificial intelligence, aerospace, low-altitude economy, biological manufacturing, and future energy[15].

Data from the Asset Management Association of China shows that as of the end of 2024, private equity investment funds and venture capital funds have invested in 16,800 projects in the semiconductor industry, with an invested principal of RMB 1.11 trillion, playing an important role in increasing the proportion of direct financing in the semiconductor industry[16]. Taking Yuanhe Holdings’ investment in Star Semiconductor (Sicom Communications) as an example, it accompanied the enterprise from its establishment to listing over 18 years, reflecting the long-termism characteristic of ‘patient capital’[17]. Xiamen Industrial Investment follows the path of ‘leading enterprises – industrial funds – industrial clusters’, providing capital support for integrated circuit enterprises through two models: direct investment in major projects and guidance of equity-participating funds, helping to form industrial clusters[18].

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Through the ‘mother fund + sub-fund’ model, Guangzhou has cumulatively invested in over 140 semiconductor projects with a total amount of nearly RMB 10 billion, covering all links of the industrial chain such as wafer manufacturing (e.g., Yuexin Semiconductor), design (Biren Technology), and materials (Xinrui Photomask)[19]. The Guangzhou Industrial Investment Mother Fund with a scale of RMB 150 billion and the Guangzhou Innovation Investment Mother Fund with a scale of RMB 50 billion continue to play a guiding role, providing a source of vitality for industrial development[20]. This model effectively leverages the role of fiscal funds, attracting more social capital to invest in the semiconductor industry.

Automobile enterprises have become an important force in semiconductor industry investment. Industrial capitals under automobile groups such as GAC Capital (under GAC Group), SAIC, and BAIC have participated in multiple rounds of financing of Yuexin Semiconductor[21]. This synergistic model of ‘industrial capital + financial capital’ not only provides financial support for semiconductor enterprises, but also establishes stable chip supply channels for automobile enterprises, forming a positive cycle of coordinated development of upstream and downstream of the industrial chain. In addition, professional investment institutions such as Lanpu Venture Capital, Walden International, Jifu Venture Capital, and GF Xinde also deeply participate in Guangzhou’s semiconductor industry investment[22].

Guangzhou issued the ‘Ten Measures for Mergers and Acquisitions’ (Several Measures of Guangzhou for Supporting Listed Companies’ Mergers and Acquisitions to Achieve High-Quality Development (2025-2027)), focusing on 15 strategic industrial clusters such as semiconductors and integrated circuits, and striving to promote no less than 60 representative merger and acquisition cases by 2027[23]. The policy supports mergers and acquisitions of upstream and downstream assets in the industrial chain, acquisition of unprofitable assets that need to improve key technical levels for strengthening and supplementing the industrial chain, and cross-industry mergers and acquisitions based on goals such as transformation and upgrading, so as to enhance enterprise profitability, expand enterprise technical layout and application fields, and strengthen comprehensive competitiveness and industrial chain dominance[24].

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Yuexin Semiconductor Technology Co., Ltd. was established in December 2017. It is a ‘national high-tech enterprise’ with independent innovation rooted in Guangdong Province, and the first 12-inch wafer manufacturing enterprise independently cultivated in Guangdong Province to enter mass production[25]. The company focuses on analog chip manufacturing, and it only took 18 months from piling to production, achieving a breakthrough from ‘zero to mass production’, which is known in the industry as ‘Yuexin Speed, Huangpu Speed, Guangzhou Speed’[26]. The company’s Phase III project was connected to the production line at the end of 2024, focusing on automotive and industrial chips; the Phase IV project focuses on high-end analog and mixed-signal chips, and after production, it will achieve a monthly output of 130,000 12-inch wafers, greatly improving the security of the domestic chip supply chain[27].

Yuexin Semiconductor has completed multiple rounds of financing since its establishment, and its shareholders include multiple investment platforms under Guangzhou and Guangdong state-owned assets, industrial capital, and financial institutions[28]. The financing completed in July 2021 was jointly led by institutions such as the Guangdong Semiconductor and Integrated Circuit Industry Investment Fund, SDIC Venture Capital, Lanpu Venture Capital, Walden International, Jifu Venture Capital, GAC Capital, Huiyou Investment, and ABC Investment; the RMB 4.5 billion financing completed in December 2022 added new investors such as the Guangzhou Science and Technology Innovation Industrial Investment Fund under Guangzhou Industrial Investment Holding Group, ABC Investment under Agricultural Bank of China, and CCB Investment under China Construction Bank[29]. The company currently has no controlling shareholder or actual controller, and its top five shareholders include Yuxin Zhongcheng (16.88%), Guangdong Semiconductor Fund (11.29%), Guangzhou Huaying (9.51%), Science City Group (8.82%), and SDIC Venture Capital Fund (7.05%)[30].

On December 19, 2025, Yuexin Semiconductor’s GEM (Growth Enterprise Market) IPO application was accepted by the Shenzhen Stock Exchange, planning to raise RMB 7.5 billion, becoming the second unprofitable enterprise accepted by the Shenzhen Stock Exchange[31]. The fundraising projects include RMB 3.5 billion for the 12-inch integrated circuit analog specialty process production line project (Phase III project) and RMB 2.5 billion for the specialty process technology platform R&D project, accounting for 80% of the total planned fundraising amount[32]. The company chose to apply the third set of listing standards for the GEM (expected market value of no less than RMB 5 billion, and revenue of no less than RMB 300 million in the most recent year), reflecting the inclusive support of the capital market for hard technology enterprises. The company expects to achieve overall profitability no earlier than 2029, which reflects the essential characteristics of heavy assets, high investment, and long cycle of the semiconductor foundry industry[33].

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Guangzhou’s semiconductor industry is shifting from ‘single-point breakthrough’ to ‘ecological layout’. The ‘Chip Street’ in Nansha has gathered enterprises such as Xinyuanneng, Xinjuneng, Jingke Electronics, Rongjie Energy, Lianjing Intelligent, Lisheng Technology, and Nansha Wafer, and the entire process from substrate epitaxy, chip manufacturing to packaging and testing can be completed within the region, forming a highly synergistic industrial chain ecosystem[34]. The settlement of VeriSilicon (Guangzhou) Co., Ltd. fills an important piece of the puzzle in the semiconductor IP field, which will promote the quality and upgrading of Guangzhou’s integrated circuits in the automotive and artificial intelligence fields, and improve the capacity utilization rate of local wafer foundries in Guangzhou through ‘semiconductor IP’ technology[35].

Relying on late-mover advantages, Guangzhou’s semiconductor industry focuses on specialty process fields to form differentiated competitiveness. In the analog chip field, Yuexin Semiconductor has become one of the foundries with leading global shipment volume of capacitive fingerprint recognition chips, and its shipment volume of high-voltage display driver chips ranks third among wafer foundries in mainland China[36]. The first-generation silicon carbide trench MOSFET process platform independently developed by Xinyuanneng fills the gap in domestic trench commercialization, which can effectively break through the bottleneck of performance improvement and narrow the gap with international giants[37]. Zengxin Technology focuses on intelligent sensor manufacturing, forming a localized industrial chain agglomeration effect with local enterprises such as Yuhai Integration, which reduces the innovation threshold for small and medium-sized enterprises in the intelligent sensor industry[38].

, the policy support for Guangzhou’s semiconductor industry continues to increase, with the participation of national and local industrial funds and social capital, providing diversified participation channels for investors. Specialty process fields such as analog chips, intelligent sensors, and wide-bandgap semiconductors have large room for domestic substitution and growth potential. Weak links in the industrial chain such as advanced packaging and testing, key materials and equipment, and semiconductor IP are facing good development opportunities.

, the semiconductor industry is characterized by rapid technological iteration, high capital intensity, and large market cycle fluctuations. Risks such as international technology blockade and supply disruption of equipment and components still exist, and enterprises face uncertainties in the upstream supply chain. The R&D of advanced processes and capacity construction require continuous large-scale investment, and the profit cycle of enterprises is relatively long. Industry capacity expansion may lead to periodic supply-demand imbalances, and attention needs to be paid to the risk of overcapacity.

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National and local industrial funds are forming a ‘two-wheel drive’ pattern. Big Fund Phase III focuses on ‘bottleneck’ links and cutting-edge technologies, while local funds focus on industrial landing and supporting facilities improvement. The establishment of the Guangdong-Hong Kong-Macao Greater Bay Area Venture Capital Guidance Fund will further strengthen regional coordination, promoting cities such as Guangzhou, Shenzhen, and Zhuhai to form an industrial division pattern with different focuses[39]. The National Venture Capital Guidance Fund is funded by ultra-long-term special treasury bonds, and actively encourages the participation of social capital at the regional fund and sub-fund levels, forming a diversified investment and financing system of ‘financial guidance + financial empowerment + social participation’[40].

The semiconductor industry is undergoing a transformation from ‘government-led’ to ‘capital-driven’. Local governments deeply participate in industrial development through methods such as direct investment, follow-up investment, and guided investment by industrial funds, forming a positive cycle of ‘attracting investment to promote introduction, investment to promote production, and investment to promote innovation’. Guangzhou has continued to invest in key projects such as Yuexin Semiconductor through multiple rounds of investment by district-owned state-owned enterprises and linkage with municipal and provincial industrial mother funds[41]. This in-depth integration of government capital and industrial capital not only gives play to the government’s strategic guiding role, but also utilizes market-oriented decision-making mechanisms and resource integration capabilities.

Driven by policy support and market forces, mergers and acquisitions (M&A) and integration in the semiconductor industry will accelerate. Guangzhou’s ‘Ten Measures for Mergers and Acquisitions’ clearly supports listed companies in carrying out cross-industry and cross-border M&A around industrial transformation and upgrading, and promotes listed companies in industries such as software and information technology services, equipment manufacturing, professional technical services, and business services to carry out horizontal and vertical absorption and mergers, so as to enhance industrial agglomeration[42]. M&A will become an important means to optimize resource allocation, promote technology integration, and enhance industrial chain dominance. In 2025, more than 250 listed companies in Guangdong disclosed or completed industrial integration M&A, with a transaction scale of over RMB 150 billion, of which more than 60% was invested in strategic emerging industries[43].

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Guangzhou’s integrated circuit industry policies have built a multi-tiered, full-chain industrial support system by seeking support from national and provincial industrial funds, encouraging the participation of financial institutions and social capital, and supporting enterprises in listing financing, mergers, and acquisitions. The National Integrated Circuit Industry Investment Fund Phase III, with a scale of RMB 344 billion and a 15-year long-term layout focusing on ‘bottleneck’ links, is expected to leverage over RMB 1.5 trillion in social capital. Social capital deeply participates in the development of the semiconductor industry through diversified paths such as industrial mother funds, venture capital, strategic investment, and M&A. The IPO process of leading enterprises such as Yuexin Semiconductor marks that Guangzhou’s semiconductor industry has entered the harvest period, and the industrial layout of ‘one core, two poles, multiple points’ is increasingly improved.

Under the multiple favorable conditions of national strategic support, local government promotion, and active participation of social capital, Guangzhou’s semiconductor industry is expected to form differentiated competitive advantages in specialty process fields such as analog chips, intelligent sensors, and wide-bandgap semiconductors, build the core bearing zone for the ‘third pole’ of national integrated circuit industry development, and bring significant strategic layout opportunities for investors.

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[1] Guangzhou Bureau of Industry and Information Technology. Draft for Comments on Several Policies of Guangzhou for Promoting the High-Quality Development of the Integrated Circuit Industry Through the Entire Chain During the 15th Five-Year Plan Period
[2] People’s Government of Guangzhou Municipality. Several Measures of Guangzhou for Focusing on the High-Quality Development of the Specialty Process Semiconductor Industry
[3] Administrative Committee of Guangzhou Development Zone. Several Policy Measures of Guangzhou Development Zone and Huangpu District for Supporting the High-Quality Development of the Integrated Circuit Industry
[4] Guangzhou Bureau of Industry and Information Technology. Guangzhou Builds the Core Bearing Zone for the “Third Pole” of National Integrated Circuit Industry Development
[5] Guangzhou Daily. Guangzhou’s “Chip Power” Races in the “Window Period”
[6] Action Plan for the Development of Semiconductor and Integrated Circuit Industry in Guangzhou (2022-2024)
[7] People’s Government of Guangzhou Municipality. Guangzhou’s “Chip Power” Races in the “Window Period”
[8] Guangzhou Municipal Bureau of Statistics. 2025 Data of Guangzhou’s Integrated Circuit Industry
[9] Sina Finance. Panoramic View of Strategic Investment of National Big Fund Phase III: Prospecting the Core Track of Semiconductor Independence
[10] Baidu Baike. National Integrated Circuit Industry Investment Fund Phase III Co., Ltd.
[11] Finance Little Doctor. Panoramic View of Strategic Investment of National Big Fund Phase III: Prospecting the Core Track of Semiconductor Independence
[12] ICV China. The Deep Meaning of China’s New Round of Semiconductor Investment
[13] Global Semiconductor Watch. “Two-Wheel Drive” of National and Local Funds, Industries Such as Integrated Circuits Expected to Usher in a New Round of Boom Period
[14] ESM China. “Two-Wheel Drive” of National and Local Funds, Industries Such as Integrated Circuits Expected to Usher in a New Round of Boom Period
[15] Ministry of Finance of the People’s Republic of China. Policy Interpretation of the National Venture Capital Guidance Fund
[16] Asset Management Association of China. Long-Term Investment, Precision Irrigation, Capital Empowers the Upgrade and Breakthrough of the Integrated Circuit Industry
[17] Asset Management Association of China. Case of Yuanhe Holdings’ Investment in Star Semiconductor (Sicom Communications)
[18] Asset Management Association of China. Integrated Circuit Industry Investment Model of Xiamen Industrial Investment
[19] Guangzhou Daily. Guangzhou’s “Chip Power” Races in the “Window Period”
[20] People’s Government of Guangzhou Municipality. Guangzhou’s “Chip Power” Races in the “Window Period”
[21] 36Kr. Guangzhou is About to Produce Another Star IPO
[22] ChinaVenture. Guangzhou is About to Produce Another Star IPO
[23] Office of the Financial Committee of the CPC Guangzhou Municipal Committee. Several Measures of Guangzhou for Supporting Listed Companies’ Mergers and Acquisitions to Achieve High-Quality Development (2025-2027)
[24] Guangzhou Finance. Policy Interpretation of Several Measures of Guangzhou for Supporting Listed Companies’ Mergers and Acquisitions to Achieve High-Quality Development
[25] Southern Plus. Guangzhou’s First Chip IPO Accepted by Shenzhen Stock Exchange, Planning to Raise RMB 7.5 Billion
[26] Guangzhou Bureau of Industry and Information Technology. Guangzhou Builds the Core Bearing Zone for the “Third Pole” of National Integrated Circuit Industry Development
[27] Securities Times. Yuexin Semiconductor, the Leading Analog Chip Enterprise in the Greater Bay Area, Has Its IPO Accepted by Shenzhen Stock Exchange
[28] ChinaVenture. Guangzhou is About to Produce Another Star IPO
[29] ChinaVenture. Guangzhou is About to Produce Another Star IPO
[30] 36Kr. Guangzhou is About to Produce Another Star IPO
[31] Securities Times. Yuexin Semiconductor, the Leading Analog Chip Enterprise in the Greater Bay Area, Has Its IPO Accepted by Shenzhen Stock Exchange
[32] Southern Plus. Guangzhou’s First Chip IPO Accepted by Shenzhen Stock Exchange, Planning to Raise RMB 7.5 Billion
[33] ChinaVenture. Guangzhou is About to Produce Another Star IPO
[34] Southern Plus. The “Chip World” Rises in Guangzhou, Is a Great Change Coming?
[35] Guangzhou Daily. Guangzhou’s “Chip Power” Races in the “Window Period”
[36] ChinaVenture. Guangzhou is About to Produce Another Star IPO
[37] Guangzhou Daily. Guangzhou’s “Chip Power” Races in the “Window Period”
[38] Guangzhou Bureau of Industry and Information Technology. Guangzhou Builds the Core Bearing Zone for the “Third Pole” of National Integrated Circuit Industry Development
[39] Global Semiconductor Watch. “Two-Wheel Drive” of National and Local Funds, Industries Such as Integrated Circuits Expected to Usher in a New Round of Boom Period
[40] 21st Century Business Herald. 2024-2025 Competitiveness Evaluation Research Report on Government Investment Funds
[41] ChinaVenture. Guangzhou is About to Produce Another Star IPO
[42] Office of the Financial Committee of the CPC Guangzhou Municipal Committee. Several Measures of Guangzhou for Supporting Listed Companies’ Mergers and Acquisitions to Achieve High-Quality Development (2025-2027)
[43] Southern Plus. One M&A Every Two Days, 1/5 of the National R&D Investment… Why Can Guangdong’s Listed Companies Lead?