Private equity firm Warburg Pincus will invest US$70 million in state-owned Datang Microelectronics, joining a growing list of foreign investors who have leapt into China's semiconductor industry. Both companies confirmed the investment but declined to provide details, saying a press conference would be held next week in Beijing. Other mainland chip companies that have recently received or are seeking outside investment include VI Micro, Shanghai Spreadtrum, BCD and Shanghai Comlent, which received US$7 million from Intel Capital. Analysts said China's chip sector had become a hot area for investment because of rising demand for chips in domestically assembled electronics. 'A lot of assembly is happening in China. And when you assemble telecoms equipment, consumer electronics or cell phones, you need chips,' Intel Capital China strategic investment director Duane Kuang said. Datang Telecom Technology, one of China's larger semiconductor houses, makes and sells telecommunications equipment for switching, optical and wireless networks. The company also develops software, semiconductors and sells Sim cards to both China Unicom and China Mobile. Warburg Pincus invests in non-public companies in Asia and elsewhere. The investment in the state sector is unusual among corporate governance-minded private equity companies.