China has set up the country’s largest-ever semiconductor investment fund to boost the development of its domestic chip industry, Beijing’s latest attempt to achieve self-sufficiency as the US tries to limit its growth.
The third phase of the National Integrated Circuit Industry Investment Fund has raised 344 billion yuan ($47.5 billion) from the central government and several state-owned banks and companies, including the Industrial & Commercial Bank of China, according to Tianyancha, an online platform that provides official company registration information. The fund was established on May 24.
The largest shareholder is the Chinese Ministry of Finance, while investment companies from local governments in Shenzhen and Beijing also contributed. The Shenzhen government is funding several chip factories in southern China’s Guangdong province in an effort to free Huawei Technologies from years of U.S. sanctions that cut the company off from a host of imported semiconductor components.
Superpowers led by the US and the European Union have funneled nearly $81 billion into developing next-generation semiconductors, escalating a global showdown with China over chip supremacy. China has also been one of the biggest spenders over the past decade, using state capital to buy local chipmakers such as Semiconductor Manufacturing International Corp. (SMIC).
The latest investment vehicle, known as Big Fund III, shows Beijing’s renewed push to build its own semiconductor supply chain, as the US pushes allies – including the Netherlands, Germany, South Korea and Japan – to block Chinese access to further sharpen chips. technology and closing gaps in existing export controls.
Shares of major Chinese chip stocks rose on Monday. SMIC, the largest chipmaker in China, rose as much as 5.4% in Hong Kong. Hua Hong Semiconductor, a smaller competitor, climbed more than 6%.
