(Yicai Global) March 10 -- Chinese carmaker SAIC Motor is teaming up with a number of state-owned investment vehicles to set up a CNY4 billion (USD574.2 million) semiconductor industry fund in Zhengzhou, Henan province.

SAIC Motor Financial Holding Management will pour CNY980 million (USD140.7 million) into the fund, which will focus on investing in auto electronics, semiconductors, new energy and relevant industries, autonomous driving projects, smart cockpit, and low-carbon transport, the Shanghai-based firm said in a statement late yesterday.

Three SAIC units are also among the new fund’s investors. Huayu Automotive Systems and Donghua Vehicle Industry will each provide CNY170 million, while Zhonglian Automobile Electronics will chip in CNY150 million.

By joining the set-up of the fund, SAIC aims to identify high-quality investment targets with the help of professional investment institutions and further improve its coverage of the automobile industrial chain, the company added.

Henan Provincial Strategic Emerging Industry Investment Fund will be the second-largest investor, contributing CNY600 million. Jiangxi Modern Industry Guide Fund will also take part.

Automakers have been boosting their investments in chip areas because the global car industry was stuck in a chip shortage after Covid-19 broke out in 2020. SAIC has invested in over 20 semiconductor-related companies, including Horizon Robotics and Amlogic.

SAIC sold 5.3 million cars last year, down 2.9 percent from 2021. Among them, 1.1 million were new energy vehicles, an increase of nearly 47 percent in the period.

In the first three quarters of last year, SAIC’s net profit fell 39 percent to CNY12.6 billion (USD1.8 billion) from a year earlier, and revenue dropped 4.6 percent to CNY527.4 billion (USD75.7 billion), according to the company’s latest earnings report.

SAIC’s shares [SHA: 600104] closed down 4.5 percent at CNY14.26 (USD2.05) apiece today. The wider Shanghai market fell 1.4 percent.

Editor: Futura Costaglione