China Sets Up Third Fund With $47.5 Bln To Boost Semiconductor Sector

(MENAFN- AzerNews) China has set up its third planned state-backed investment fundto boost its Semiconductor industry, with a registered capital of344 billion yuan ($47.5 billion), according to a filing with agovernment-run companies registry, Azernews reports citing Reuters .

The hundreds of billions of yuan invested in the sector putsinto perspective President Xi Jinping's drive to achieveself-sufficiency for China in semiconductors.

That commitment has taken on renewed urgency after the S a series of export control measures over the last couple ofyears, citing fears Beijing could use advanced chips to boost itsmilitary capabilities.

Chinese chip shares rose, with the CES CN Semiconductor Indexrallying more than 3% and set to log the biggest one-day gain inmore than a month.

The third phase of the China Integrated Circuit IndustryInvestment Fund was officially established on May 24 and registeredunder the Beijing Municipal Administration for Market Regulation,according to the National Enterprise Credit Information PublicitySystem, a government-run credit information agency.

The third phase will be the largest of the three funds launchedby the China Integrated Circuit Industry Investment Fund, known asthe "Big Fund."

China's finance ministry is the biggest shareholder with a 17%stake and paid-in capital of 60 billion yuan, according toTianyancha, a Chinese companies information database company. ChinaDevelopment Bank Capital is the second-largest shareholder with a10.5% stake.

Seventeen other entities are listed as investors, including fivemajor Chinese banks: Industrial and Commercial Bank of China, ChinaConstruction Bank, Agricultural Bank of China, Bank of China, andBank of Communications, with each contributing around 6% of thetotal capital.

The first phase of the fund was established in 2014 withregistered capital of 138.7 billion yuan, and the second phasefollowed in 2019 with 204 billion yuan.

The Big Fund has provided financing to China's two biggest chipfoundries, Semiconductor Manufacturing International Corporation,and Hua Hong Semiconductor as well as to Yangtze MemoryTechnologies, a maker of flash memory and a number of smallercompanies and funds.

One of the major areas the third phase of the fund will focus onis equipment for chip manufacturing, Reuters reported in September, the Big Fund is considering hiring at least two institutionsto invest the capital from the third phase.



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