The investment comes as the government identifies chips as one of several sectors in which it wants the country to become more self-reliant under its “Made in China 2025” initiative.
In a filing to the China Securities Regulatory Commission (CSRC) published online on Thursday, VeriSilicon revealed a fund run by Xiaomi became its second-largest external shareholder in June.
VeriSilicon’s biggest external shareholder is the China Integrated Circuit Industry Investment Fund, a centralised, national-level fund for the domestic semiconductor industry, popularly known as “The Big Fund”.
The firm is headquartered in Shanghai and has research and development centres at home and in the United States. It typically works as a contractor to other chip companies, helping them complete additional parts of semiconductor design.
Xiaomi launched a semiconductor division in 2014 and three years later announced its first system-on-a-chip, the Surge S1. The chip featured in Xiaomi’s Mi 5 smartphone but was not rolled out more widely.
It then sat on its hands until April when an internal memo stated that Xiaomi would spin off part of its chip division into a subsidiary called Big Fish focused on making chips for internet-of-things devices.
Xiaomi is not alone in its chip ambitions. Huawei’s chip-making HiSilicon subsidiary makes Kirin processors for its own smartphones, which experts said are roughly ompetitive with top-of-the-line chips from US leader Qualcomm
Alibaba Group last year bought Chinese chipmaker C-Sky. Its chief technology officer later said the firm will unveil its first artificial intelligence chip in the second half of 2019.
The trade war with the US has added some impetus to the issue. China wants to be free of its technology dependence on the United States which demonstrated how much power it had by damaging Huawei on a spying claim.