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Chinese semiconductor start-up Xiangdixian Computing Technology has reportedly collapsed amid a cash crunch and dismissed all employees, highlighting difficulties faced by domestic chip firms despite a nationwide self-sufficiency push.

Xiangdixian, based in China’s southwestern city of Chongqing, held an all-staff meeting on August 30 where it announced the dissolution of the company, terminating the contracts of nearly 400 employees.

The company had failed to fulfil terms agreed upon in a previous funding round, following which its shareholders filed a lawsuit that led to the freezing of its bank account, TMTPost reported. Xiangdixian is now seeking new investors and trying to get access to its account.

Xiangdixian, founded in September 2020 with a registered capital of 17.82 million yuan (US$2.51 million), specialises in graphics processing units (GPU).

It is helmed by chip veteran Tang Zhimin, who previously worked for Loongson Technology and Hygon Information Tech, two Chinese chip companies that make microprocessors.

In September 2022, the company launched a GPU with 12-nanometre node technology named Tianjun No 1, which it claimed had “reached an internationally advanced level” and would “effectively fill the gap in the domestic market”.

Its Tianjun series GPUs have successfully achieved research and development as well as mass production goals, Xiangdixian said in a post on WeChat on August 20.

Xiangdixian’s struggles represent another cautionary tale in China’s semiconductor industry, which has rapidly expanded in recent years as Beijing ramped up its push for technology self-sufficiency amid intensified trade tensions with the US.

Recent chip firm debacles include the once high-flying chip firm  Beijing Zuojiang  Technology, which in July was delisted from the Shenzhen Stock Exchange after the China Securities Regulatory Commission investigated the firm for financial fraud.

Woodson, a Shanghai-based semiconductor start-up founded in 2019 with a registered capital of 10 billion yuan, was liquidated in June after going bankrupt.

New government funds are still being formed as China continues to drum up support and subsidies for the domestic chip industry. The Beijing municipal government late last month set up a new semiconductor investment fund with a registered capital of 8.5 billion yuan.

Editor：Vicky

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