On October 9, Wuxi Hua Hong Grace Phase III Semiconductor completed industrial and commercial registration changes, raising registered capital from RMB 6.68 million to $4.17 billion and bringing in multiple industrial capital shareholders. Founded in October 2025, the company shifted from a wholly owned subsidiary to a multi-party joint venture in just one year.
New shareholders include Hua Hong Grace Semiconductor, Wuxi Xihong Guoxin Phase II Investment, Huaxin Dingxin (Beijing) Equity Investment Fund under Big Fund Phase III, and China Development Bank's new policy-based financial instrument. The revised structure: Shanghai Hua Hong Grace 26%, Hua Hong Grace Semiconductor 25%, Wuxi Xihong Guoxin Phase II 20%, Huaxin Dingxin 15%, and CDB's policy instrument 14%. The Hua Hong system holds 51% combined, keeping control.
The equity arrangement sends a clear signal: Big Fund Phase III takes 15%, CDB's policy instrument follows with 14%, and local capital Wuxi Xihong Guoxin Phase II carries 20%. The three external investors hold 49% combined, providing ample capital while ensuring Hua Hong's leadership is not diluted.
The Wuxi Phase III plan was already clear months ago. Per Hua Hong Grace's earlier announcement, the project involves $6.95 billion total investment**, building a new **12-inch specialty process line** with **55,000 wafers per month** capacity, focused on **non-volatile memory, analog power, RF, and power devices**. Project capital is **$4.17 billion, with the rest via debt financing. Production is expected to start by December 2027.
Notably, the funding structure is diversified. Hua Hong Grace disclosed in early September that it plans to use RMB 5.556 billion in over-raised funds and remaining proceeds from two completed projects for capital contribution, with the shortfall covered by own or self-raised funds. With the external shareholder contributions confirmed, Wuxi Phase III's capital layer is now closed, and subsequent debt financing will proceed independently through the project entity.
Strategically, Wuxi Phase III is not about catching up in advanced logic, but scaling specialty process capacity. Non-volatile memory, analog power, RF, and power devices serve long-cycle demand in automotive electronics, industrial control, and IoT. Hua Hong's existing specialty process base gives the line technical feasibility, while Big Fund Phase III adds policy-level certainty.
ICgoodFind Summary: Big Fund Phase III makes a precise bet on specialty process foundry. With $4.17 billion in capital secured, Wuxi Phase III moves into real execution. Capacity release in memory and analog power platforms will give China's chip supply chain a stronger manufacturing foundation.
