Big Fund buys into fingerprint chip firm Goodix for US$429m

China’s national semiconductor fund, known as the Big Fund, is buying 6.65 percent of fingerprint authentication chip designer Goodix for 2.83 billion yuan (US$429 million).

Goodix announced the investment by the National Integrated Circuit Fund (Big Fund), founded in 2014 with 120 billion yuan, in a statement to the Shanghai Stock Exchange on Thursday.

Shares of Goodix, whose clients include Huawei and Oppo, hit the 10 percent daily cap to reach 122 yuan on the announcement, on a day that saw the overall index fall 2.29 percent.
 
China is focusing on boosting its own semiconductor industry, which currently depends strongly on importing chips and technology.

The Big Fund focuses on listed firms and market leaders in sub-categories in the chip industry, such as fingerprint authentication, said Gu Wenjun, chief analyst with ICWise, a company which specializes in following China’s semiconductor and electronics industry.

Chip imports hit US$227 billion in 2016, almost double oil imports, data from China's customs agency shows.

Senior Chinese officials recognize the urgency to strengthen the country's own integrated circuit industry, a priority that drove the establishment of the Big Fund.

Market share of domestic firms is expected to double to 40 percent by 2020 from 20 percent last year and hit 70 percent by 2025, under the central government's national blueprint for the integrated circuit industry.

Shenzhen-based Goodix, which specializes in biometrics authentication, made a profit of 763 million yuan in the third quarter of this year, up 26.6 percent year on year.