China to Launch $40 Billion Chip Fund to Achieve Self-Sufficiency

Beijing, China (September 5, 2023) — China is set to launch a new $40 billion state-backed investment fund to boost its semiconductor sector, as the country ramps up efforts to catch up with the U.S. and other rivals.

The fund, which is likely to be the biggest of three launched by the China Integrated Circuit Industry Investment Fund, also known as the Big Fund, will focus on investing in equipment for chip manufacturing.

President Xi Jinping has long stressed the need for China to achieve self-sufficiency in semiconductors. That need has become all the more pressing after Washington imposed a series of export control measures over the last couple of years, citing fears that Beijing could use advanced chips to boost its military capabilities.

The new fund was approved by Chinese authorities in recent months and is expected to be launched in the coming months. China’s finance ministry is planning to contribute 60 billion yuan, or about $9 billion, to the fund. Other contributors could not be immediately learned.

The fund is expected to invest in a wide range of semiconductor companies, from chipmakers to equipment suppliers. It is also expected to invest in research and development of new chip technologies.

The launch of the new fund is a significant step in China’s efforts to achieve self-sufficiency in semiconductors. However, it remains to be seen whether the fund will be enough to close the gap between China and the U.S. in the chip industry.

Here are some key takeaways from the news story:

• China is launching a new $40 billion state-backed investment fund to boost its semiconductor sector.
• The fund will focus on investing in equipment for chip manufacturing.
• The fund is expected to be launched in the coming months.
• China’s finance ministry is planning to contribute 60 billion yuan, or about $9 billion, to the fund.
• The fund is expected to invest in a wide range of semiconductor companies, from chipmakers to equipment suppliers.
• The fund is also expected to invest in research and development of new chip technologies.
• The launch of the new fund is a significant step in China’s efforts to achieve self-sufficiency in semiconductors.

Here are some additional details about the news story:

• The new fund is likely to be the biggest of three launched by the China Integrated Circuit Industry Investment Fund, also known as the Big Fund.
• The Big Fund’s previous two funds raised 138.7 billion yuan and 200 billion yuan, respectively.
• The new fund is expected to be used to invest in a wide range of semiconductor companies, from chipmakers to equipment suppliers.
• The fund is also expected to invest in research and development of new chip technologies.
• The launch of the new fund is a significant step in China’s efforts to achieve self-sufficiency in semiconductors. However, it remains to be seen whether the fund will be enough to close the gap between China and the U.S. in the chip industry.
  
  Source: Reuters