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China Launches Massive $47 Billion Investment Fund to Boost Semiconductor Industry
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China Launches Massive $47 Billion Investment Fund to Boost Semiconductor Industry

by Aiman MaulanaMay 29, 2024
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China has taken a significant step to fortify its semiconductor industry by establishing a substantial new investment fund. Official documents reveal that this initiative, supported by the Chinese finance ministry and six major banks, allocates CNY 344 billion (over $47 billion) for chip manufacturing equipment, as reported by Reuters.

The Big Fund: Phase Three of the China Integrated Circuit Investment Fund

China Launches Massive $47 Billion Investment Fund to Boost Semiconductor Industry

This development marks the third phase of the China Integrated Circuit Investment Fund, commonly referred to as the “Big Fund.” Officially established on Friday, May 24, 2024, it represents the largest fund of its kind since its inception in 2014. According to Tianyancha, a prominent Chinese company information database, the finance ministry is the primary investor, holding a 17% stake with a paid-in capital of CNY 60 billion.

The second-largest contributor to the fund is China Development Bank Capital, which holds a 10.5% share. Additional financial backing comes from five major banks, each contributing around 6% of the total capital:

  • Industrial and Commercial Bank of China
  • China Construction Bank
  • Agricultural Bank of China
  • Bank of China
  • Bank of Communications

The Big Fund has already played a pivotal role in financing major Chinese chip foundries, such as SMIC and Hua Hong Semiconductor. The infusion of hundreds of billions of yuans underscores China’s strategic objective to achieve self-sufficiency in advanced semiconductor technologies. This move comes amid increasing pressure from the United States, which has been implementing export control measures targeting China’s access to critical semiconductor technologies.

China’s ambitious funding strategy aims to bolster its domestic semiconductor capabilities, reducing reliance on foreign technologies and fostering homegrown innovation. This significant investment is poised to advance the nation’s position in the global semiconductor landscape, ensuring robust growth and technological advancement in the face of international challenges.

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Pokdepinion: It’s a much needed move given the sanctions that appear to not be changing anytime soon. It might not be great in the first few years but I’m confident it will be more than satisfactory within 5 years.

About The Author
Aiman Maulana
Jack of all trades, master of none, but oftentimes better than a master of one. YouTuber, video editor, tech head, and a wizard of gaming. What's up? :)