SL Capital, a private equity firm founded by SK and Beijing-based Legend Capital, signed an agreement with authorities in the eastern Chinese city of Wuxi on Tuesday to jointly set up a 1 billion yuan ($140 million) fund, according to a statement from the local government.
SL Capital is financing the investment through a joint venture with Wuxi Industry Development Group, which is backed by the local government. The move is intended to help leading companies in South Korea’s chip supply chain set up offices in the municipality, the statement said.
The new fund also includes money from Wuxi National Hi-Tech District. The parties involved in the fund have worked together to bring South Korean chip equipment makers Nextin and Gigalane to Wuxi, the statement said.
“SL Capital is a fund established by SK Group jointly with Legend Capital, but is managed by SL Capital and is not directly involved in SK Group’s management of the fund,” SK said in a statement to Bloomberg News, adding that SL Capital has nothing to do with SK Hynix’s investments in semiconductors.
According to the fund’s official WeChat account, SL Capital has invested in several Chinese semiconductor companies, including AI chip maker Black Sesame International Holding.
A Nextin official told Bloomberg News that the company is still in the process of setting up facilities in Wuxi after signing a preliminary agreement with local authorities in August 2023.
According to a company statement in June, Gigalane is preparing to set up a manufacturing facility in Wuxi to target the Chinese market. Several calls and an email inquiry to the company went unanswered.
China is aggressively seeking more partners to help it achieve self-sufficiency in key areas such as the semiconductor industry, thereby overcoming increasing US restrictions that are making it difficult for the Asian country to access high-tech.
