Beijing initiates significant state-backed investment fund to bolster semiconductor industry
Date
5/28/2024 5:25:01 AM
(MENAFN) In response to ongoing efforts by the United States to restrict China's access to advanced Semiconductor technology, Beijing has initiated a significant state-backed investment fund aimed at bolstering the country's semiconductor industry. The newly launched fund, known as the China Integrated Circuit Industry Investment Fund Phase III, amounts to 344 billion yuan (approximately USD47 billion). This initiative marks the third in a series of strategic investments undertaken by China over the past decade, reflecting the nation's commitment to achieving self-sufficiency in semiconductor production.
The establishment of the China Integrated Circuit Industry Investment Fund Phase III builds upon previous endeavors, including the initial fund launched in 2014, which saw an investment of approximately 140 billion yuan, and a subsequent fund in 2019 valued at around 200 billion yuan. Collectively known as the "Big Fund," these initiatives align with China's ambitious industrial development plan, "Made in China 2025," aimed at enhancing the nation's technological capabilities and global competitiveness.
Although specific investment targets for the Phase III fund have not yet been officially disclosed, earlier reports suggest a focus on semiconductor technologies related to artificial intelligence (AI) and manufacturing equipment, as well as research and development projects geared toward enhancing AI capabilities utilizing existing technologies.
The initiative is spearheaded by China's Finance Ministry, which holds a 17 percent stake in the fund, alongside significant contributions from other state-owned entities. Notably, the fund's composition includes a 10 percent share held by the state-owned National Development Bank, as well as a 9 percent stake held by an investment company under the Shanghai municipal government, with the remaining portion distributed among 16 additional state-owned entities.
China's proactive measures to strengthen its semiconductor industry come amid heightened tensions with the United States over technological competition. The United States has implemented stringent export controls on advanced semiconductor products and fabrication equipment, citing concerns over potential military applications and national security implications. As China endeavors to reduce its reliance on foreign technology and achieve semiconductor self-sufficiency, the launch of the Phase III investment fund underscores the nation's determination to assert its position in the global semiconductor market.
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