In a bid to bolster its domestic semiconductor chip industry, China is set to launch a substantial state-backed investment fund totaling $40 billion, according to a recent Reuters report. This sizeable funding initiative marks the latest and most substantial effort by China to develop its semiconductor sector.
The $40 billion fund constitutes the largest pool of capital within the China Integrated Circuit Industry Investment Fund, surpassing the $19 billion allocated in 2014 and the $27 billion in 2019. This ambitious move underscores China’s determination to reduce the technological gap and intensify competition with the United States and other global players in the semiconductor market.
China’s interest in advancing its semiconductor capabilities has been further catalyzed by a series of export control regulations imposed by the U.S. in recent years, aimed at limiting China’s access to crucial chip manufacturing equipment. Additionally, trade sanctions have posed challenges to China’s semiconductor industry.
The source of this substantial investment is expected to primarily originate from China’s Ministry of Finance, although specific contributors beyond this source remain undisclosed. The majority of these funds will be earmarked for the development of essential tools and infrastructure required for chip production, marking a pivotal step in China’s quest to assert its presence in the semiconductor industry.
