Recently, the National Integrated Circuit Industry Investment Fund Phase III Co., Ltd. (National Big Fund Phase III) was established. The legal representative is Zhang Xin, with a registered capital of RMB 344 billion, the largest in history. The scope of business includes private equity investment fund management, venture capital fund management services, using private equity funds to engage in activities such as equity investment, investment management, asset management, etc., and enterprise management consulting.

According to shareholder information, the company is jointly owned by 19 shareholders, including the Ministry of Finance, Guokai Finance Co., Ltd., Shanghai Guosheng (Group) Co., Ltd., Industrial and Commercial Bank of China Co., Ltd., China Construction Bank Co., Ltd., Agricultural Bank of China Co., Ltd., and Bank of China Co., Ltd. The Ministry of Finance is its largest shareholder, holding 17.44% of the shares.

The registered capital of the third phase of the Big Fund surpassed the sum of the previous two instalments

One obvious change is that the registered capital of Big Fund Phase III is higher than the sum of Phase I and Phase II.

Looking back at the history of China's Big Fund, China's first National Integrated Circuit Industry Investment Fund (Big Fund Phase I) was established in 2014 with a registered capital of 98.7 billion yuan, with a total investment scale of 138.7 billion yuan; National Integrated Circuit Industry Investment Fund Phase II Co., Ltd. (Big Fund Phase II) was established in 2019 with a registered capital of 204.2 billion yuan. Furthermore, in March of this year, Bloomberg reported that the third phase of the National Capital Fund raised 200 billion yuan, and now this figure exceeds expectations by 70%.

Looking at the direction of investment, the first two phases of the National Capital Fund laid a solid foundation for the initial development of China's chip industry in terms of manufacturing, equipment and materials.

According to public information, the first phase of the Big Fund had basically completed investment at the end of 2018. In the first phase of the Big Fund's investment projects, integrated circuit manufacturing accounted for 67%, design accounted for 17%, sealing and testing accounted for 10%, and equipment materials accounted for 6%. As can be seen, nearly half of the capital of the first phase of the Big Fund was invested in the field of integrated circuit manufacturing, followed by the IC design and packaging and testing industry, which accounted for a relatively small share of the upstream part of the semiconductor equipment and materials industry chain.

The second phase of the Big Fund is skewed towards equipment materials. According to the data, the wafer manufacturing sector still received the most investment from the second phase of the Big Fund, reaching 70%; the share of investment in equipment and materials increased, reaching about 10%; the investment amount in IC design projects also reached a ratio of about 10%; and the share of investment in the sealing and testing industry declined significantly.

Regarding the specific investment of the third phase of the Big Fund, CITIC Securities expects semiconductor manufacturing to remain the largest, and is expected to further increase support for critical areas such as equipment, materials, components, EDA, and IP. It is recommended to continue to focus on leading companies in related fields.

Furthermore, with the establishment of Big Fund Phase III, there were commercial and commercial changes in Big Fund Phase 1 and Big Fund Phase II. Lou Yuguang stepped down as the legal representative and chairman of the two companies, and Zhang Xin took over. Zhang Xin is also the legal representative and chairman of the third phase of the Big Fund.

The six major state-owned banks participated for the first time, and they plan to invest more than 100 billion dollars

The main investment structure of the third phase of the National Big Fund has also undergone significant changes. Banks have been added as major shareholders, and local state-owned assets are concentrated in Beijing and Guangdong.

Yesterday, the six major banks announced their investment in the third phase of the National Big Fund. Specifically,$CCB (00939.HK)$,$BANK OF CHINA (03988.HK)$,$ABC (01288.HK)$und$ICBC (01398.HK)$It will soon invest 21.5 billion yuan and hold 6.25% of the shares;$BANKCOMM (03328.HK)$It is planned to invest 20 billion yuan, accounting for 5.814%;$PSBC (01658.HK)$It is planned to invest 8 billion yuan, accounting for about 2.33%. Bank shareholders hold about 33% of the total shares, and the six banks mentioned above will invest a total of 114 billion yuan.

Compared to the previous two periods, in the third phase of the National Big Fund, apart from “old faces” such as the Ministry of Finance, Guokai Finance, and Guosheng Group, central enterprises and local state-owned assets such as Beijing and Guangdong became the “main forces” of the third phase of the National Big Fund.

Since this year, the price of memory chips has increased by about 50% compared to the same period last year. According to some reports, the price of memory chips may continue to rise. The contract price for new DRAM memory products is expected to rise 13% to 18% in the second quarter of this year.

According to Shanxi Securities, the upward trend in prices is clear, and storage has entered a new upward cycle. In the future, as operating margins improve due to continued price increases in storage prices, storage vendors are expected to face a double blow from Davis in performance and valuation, and there is plenty of room for a rebound in the industry.

According to a research report released by Northeast Securities, the boom in the memory chip industry has entered an upward channel, and domestic manufacturers can look forward to the future. On the demand side, the Chinese memory chip market is in sync with the global market cycle, and the growth rate is higher than that of the global market. On the supply side, overseas manufacturers have long had an oligopoly, and domestic manufacturers have gradually broken through. Leading companies in the fields of storage modules, niche storage, and memory interface chips have broad room for growth.

Which concept stocks will benefit?

With the formal establishment of the third phase of the National Big Fund, the semiconductor industry welcomed significant benefits. Futu Information sorted out some semiconductor concept stocks for reference by bullies.

Semiconductor companies:$SMIC (00981.HK)$,$HUA HONG SEMI (01347.HK)$,$SHANGHAI FUDAN (01385.HK)$,$CE HUADA TECH (00085.HK)$,$SOLOMON SYSTECH (02878.HK)$;

Semiconductor equipment manufacturers:$ASMPT (00522.HK)$;

Also, if investors don't want to invest in chip stocks, there are also ETFs to choose from:$Global X China Semiconductor ETF (03191.HK)$,$Fubon ICE FactSet Taiwan Core Semiconductor Index ETF (03076.HK)$,$Samsung Bloomberg Global Semiconductor ETF (03132.HK)$,$Global X China Semiconductor ETF (09191.HK)$,$Global X Asia Semiconductor ETF (03119.HK)$.

editor/tolk