Billion-dollar investment from China to the chip industry!

Chips are of great strategic importance as fundamental components of modern electronic devices. Many countries around the world continue to rapidly increase their investments in this field. China also announced that it has established a new state-backed investment fund to develop the chip industry. This step by China aims to ensure technological independence while increasing competition in the global chip industry. Here are the details…

China allocated a budget of $47 billion for the chip industry

China has established a new investment fund to develop its chip industry, according to official documents. Key investors in the $47.5 billion (344 billion yuan) fund established for chip production equipment include the Chinese finance ministry and six major banks.

This support to the chip industry is also the third phase of the China Integrated Circuit Industry Investment Fund, which was established on May 24. The most comprehensive fund established since 2014 is known locally as the “Big Fund”. The fund’s main investor is the ministry of finance, with a 17% stake and paid-up capital of 60 billion yuan, according to Tianyancha, a China-based company database provider.

China Development Bank Capital, with a 10.5% share, is the second largest shareholder. The remaining five banks, each accounting for approximately 6% of the total capital, are Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China and Bank of Communications.

This massive fund provides financing for SMIC and Hua Hong Semiconductor, two of China’s largest chipmakers. This huge billion-dollar investment by China can be considered as an indicator of its effort to become self-sufficient against the export control measures implemented by the USA in the chip field. It is also wondered how this move of China in the chip industry will affect the global technology balances.