Global private equity investment in semiconductors falls in 2025

Global private equity and venture capital investment in the semiconductor sector fell 45% year over year to $13.35 billion in 2025, according to S&P Global Market Intelligence data.

Last year's investment value, however, is skewed by an outsize transaction in 2024, when Apollo Global Management Inc. acquired an $11.1 billion stake in Intel Ireland Ltd.'s fabrication facility, one of the largest private equity deals in the sector's history.

China accounted for most of the investment value in 2025, though private equity-backed transactions in the sector were down 6% year over year to $7.71 billion. In five of the last six years, the country attracted the bulk of global chip investment in a race to construct semiconductor wafer fabrication plants.

"[I]n the last years, 50% of all new fab capacity in the world was added in China," said Thomas Kirschstein, a partner covering semiconductors, electronics and AI hardware at consultancy firm Roland Berger LLC. "There are also limits to how fast you can grow, be it the number of people you have, the ramp-up of the factories, or the local demand. We had hype in the last years, and now this is normalizing."

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Venture capital, however, has remained robust in China, with investment often directed to semiconductor materials and chip design companies.

Rounds of funding for the Chinese semiconductor sector totaled 286 in 2025, more than triple the number of rounds in the US and Europe combined, according to Market Intelligence data.

Data center factor

Private equity investment in semiconductors is expected to grow in 2026, driven by the global AI transition and the expansion of green energy technology and electric vehicles, said Christophe Duverne, partner and co-founder of semiconductor advisory firm Silian Partners.

"We see that the drivers of demand are much broader than they used to be," Duverne said.

In the US, private equity deal value was up 24% to $3.80 billion in 2025. Kirschstein, from Roland Berger, added that the increasing investment in the US is largely driven by the growing demand for AI and data centers.

"Most of the value of a new data center is in the AI hardware used for computing, of which semiconductors like [graphics processing units], CPUs, memory, storage represent the largest share," Kirschstein said.

Largest deals in the chip sector

In 2025, six of the 10 largest private equity-backed investments were in China.

The largest transaction was chipmaker Hefei Wanxin Integrated Circuit Co. Ltd.'s $1.32 billion series A funding round.

Private equity firms including Anhui Transportation China Merchants Private Fund Management Co. Ltd., China Merchants Zhiyuan Capital Investment Co. Ltd., Guoyuan Di and ICBC Financial Asset Investment Co. Ltd. participated in the round.

Yangtze Memory Technologies Co. Ltd., which designs and manufactures flash memory and storage devices, secured $1.30 billion in a series B round, marking the second-largest transaction in 2025.

Firms including China Internet Investment Fund Management Co. Ltd., Guangdong Technology Financial Fund of Funds Management Co. Ltd. and Haitong Leading Private Equity Fund Management Co. Ltd. participated in the round.