China has set aside $47 billion to boost domestic semiconductor development.
The fund makes up the third version of the ‘National Integrated Circuit Industry Investment Fund,’ which is known as the ‘Big Fund.’ This pool of money is made up of 344 billion yuan of capital ($47bn)
Government agencies and Chinese banks have invested in the fund, with the China Development Bank taking the biggest share of the pie as it has a stake of around 17.4%.
The second largest shareholder is Guokai Financial Co Ltd with 10.4651%, followed by the Shanghai Guosheng Group Co Ltd which holds 8.7208%.
According to the Chinese news publisher Yicai, this third phase of investment was registered and established on May 24.
The CEO of Ai Media Consulting Zhang Yi told the First Financial Reporter that the third phase of the fund had diversified and expanded in the field which includes traditional equity investment, asset management, and venture capital fund management services.
It’s expected that the newest iteration of the big fund will be carried out on a much broader range with more flexibility and diversity in its investment strategy.
As like the former two phases, the third investment aims to support research and development and the production and application of the domestic integrated circuit industry. It’s hoped this will further increase China’s prospects in the global semiconductor industry too.
It’s not just China who are focused on a push in the semiconductor industry
There is fierce competition in the semiconductor industry and while the likes of Yangtze Memory and China Semiconductor Manufacturing International Corp have been hugely successful out of China, others (like Wuhan Hongxin Semiconductor) have struggled despite backing from the government.
As China plans to gear up once more, they face stiff competition and have even had international sanctions from the United States preventing them from buying high-end processors and accelerators.
While the figure is nowhere close to what China’s latest investment fund includes, the government in the United States is making moves to bolster the production of chips.
In March, technology giant Intel secured $8.5 billion in direct funding and $11 billion in loans from the government to help re-establish American leadership in semiconductor manufacturing.
Just a few months before, in December of 2023, the U.S. Commerce Department announced a $35 million award to BAE Systems to enhance domestic production too.
Featured Image: Photo by Vishnu Mohanan on Unsplash
