(Yicai Global) Feb. 22 -- Shares of Silan Microelectronics soared after the Chinese chipmaker said a state-owned fund focused on the semiconductor industry plans to invest CNY600 million (USD95 million) in its 12-inch chip project.

Silan’s stock price [SHA: 600460] closed 5.3 percent up at CNY52.73 (USD8.32) today, giving it a market capitalization of CNY74.7 billion (USD11.8 billion).

China Integrated Circuit Industry Investment Fund Phase II, also known as Big Fund II, will acquire a 14.7 percent stake in Xiamen Silan Microchip Manufacturing, a joint venture between Silan and Xiamen Semiconductor Investment Group, its Hangzhou-based parent firm said late yesterday. Silan will invest another CNY285 million to promote the project.

Founded in 2018, Silan Microchip put its first 12-inch chip production line into production last year. It has already launched upgrade and capacity expansion projects. Big Fund II has CNY200 billion (USD31.5 billion) in funding and was set up in 2019 to succeed Big Fund I.

The new investment will raise Silan Microchip's capital adequacy ratio and quicken the construction and operation of its 12-inch chip production line, Silan added.

After the transaction is completed, Xiamen Semiconductor will remain Silan Microchip’s largest shareholder with about 66.6 percent. Silan’s stake will increase to 18.7 percent from 15 percent. Big Fund II will become the third-largest shareholder.

Established in 1997, Silan is one of the biggest integrated circuit chip designers and manufacturers in China with over 2,000 research and development staff. Its products are used in home appliances,  consumer electronics, light-emitting diode lighting, and elsewhere, according to its website.

Editor: Futura Costaglione