China’s government reports have stated that the previous funds have managed to raise 38.7 billion yuan and 200 billion yuan respectively
In an effort to beat the US and other rivals in the semiconductor and technology space, China is all likely to unleash another investment scheme backed by the government. The scheme is looking forward to raise $40 billion to boost the semiconductor sector, two unnamed officials familiar with this subject told Reuters.
Dubbed as the Big Fund, it is going to be the largest of all the three funds launched until now. The fund’s target of $41 billion has surpassed other funds, which were unveiled in 2014 and 2019. China’s government reports have stated that the previous funds have managed to raise 38.7 billion yuan and 200 billion yuan respectively.
The investment fund will be majorly utilized for the chip manufacturing equipment and the Chinese premier Xi Jinping has been urging for self-reliance in the semiconductor space for a very long time. This self-sufficiency has turned out to be an urgent need of the hour when the US government imposed a series of bans on export of key technologies and equipment to China. Back in October 2022, the US again carried out some imperative sanctions that prevented China from accessing any kind of sophisticated chip-making equipment and the allies Netherlands and Japan have taken the same steps.
People familiar with the matter said in recent months, the Chinese authorities have approved the new fund. One of the officials told Reuters that the Finance Ministry of China is planning to sanction 60 billion Yuan. In China, the State Council Information Office handles media queries on behalf of the government, the finance ministry and the Ministry of Industry and Information Technology.
Sources have also highlighted that the matter is now unclear when the fundraising procedure would begin and the picture was also not crystal-clear when the third fund would be launched or if any alterations will be made to the plan or not. Previously, the Big Fund is said to have financed two biggest chip foundries in the country, Semiconductor Manufacturing International Corporation and Hua Hong Semiconductor. Notwithstanding the investments, China failed to emerge as a leading or competitive nation in the international semiconductor supply chain, mostly for advanced chips.
