BYD Semiconductor raises $113 million to scale up production

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BYD Semiconductor secures $265 million in outside investments.
Image: BYD

BYD Semiconductor, the chipmaking arm of Sino electric carmaker BYD, announced it secured ¥800 million ($113 million) in outside capital. The unit intends to use its resources to scale up its production capability.

The component manufacturer’s fundraising efforts are occurring at a time when national semiconductor independence is becoming increasingly in vogue.

Details on BYD Semiconductors Capital Injection

BYD Semiconductor filed a report with the Shenzhen Stock Exchange revealing SK Group led its Series A+ round with a ¥150 million ($21 million) contribution. A South Korean-based conglomerate, SK Group is the parent corporation of SK Hynix, the world’s third-largest microelectronics manufacturer.

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TechCrunch notes ARM and Semiconductor Manufacturing International Corporation (SMIC) also bought equity in the neophyte chip producer.

BYD created its chipmaking unit in 1995 to support its vehicle manufacturing operations. However, in April, the corporation spun its component unit off into its own company ahead of a listing on a local burse. In May, the firm secured ¥1.9 billion ($265 million) in a Series A round that saw participation from Sequoia Capital, SDIC Fund, and 12 other organizations.

Why BYD Semiconductor is Appealing to Investors

The reason some of the world’s biggest semiconductor manufacturers are pouring money into BYD Semiconductor is its core product, insulated gate bipolar transistors (IGBTs). The component is useful to BYD as it makes electric cars more energy-efficient and dependable. The electronic switch is so valuable that it represents 7 to 10 percent of a battery-power vehicle’s total cost.

In addition, BYD Semiconductor is the only Chinese company that designs and manufactures its own IGBTs.

In light of resurgent Sino-American trade tensions, the firm’s technological independence makes it very valuable to its parent corporation. That same quality makes it appealing to investors as foreign suppliers presently dominate the Chinese IGBT market.

BYD Semiconductor’s flagship component also has applications in home appliances, HVAC systems, and rail transport.

Because of the increasing electrification of the auto industry and the product’s versatility, MarketsandMarkets estimates the global IGBT sector will be worth $5.64 billion in 2025.

BYD Semiconductor looks like one of the chip industry’s best long-term bets right now.

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