(Bloomberg) — China has created the country’s largest-ever semiconductor investment fund to boost the development of the domestic chip industry, Beijing’s latest effort to achieve self-sufficiency as the U.S. seeks to curb its growth.
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The third phase of the National Integrated Circuit Industry Investment Fund has accumulated 344 billion yuan ($47.5 billion) from the central government and several banks and state-owned enterprises, including the Industrial & Commercial Bank of China Ltd., according to with Tianyancha, an online platform that aggregates official company registration information. The fund was established on May 24th.
The largest shareholder is China’s Ministry of Finance, while investment companies owned by local governments in Shenzhen and Beijing have also contributed. The Shenzhen government has been financing several chip factories in southern China’s Guangdong province in a bid to free Huawei Technologies Co. from years of U.S. sanctions that have isolated it from a large number of imported semiconductor components.
Superpowers led by the US and the European Union have funneled nearly $81 billion into launching the next generation of semiconductors, intensifying a global clash with China over chip supremacy. China has also been a top spender over the past decade, using state capital to finance local chipmakers such as Semiconductor Manufacturing International Corp.
The latest investment vehicle, known as Big Fund III, shows Beijing’s renewed push to build its own semiconductor supply chain, while the US urges allies – including the Netherlands, Germany, South Korea and Japan – to further tighten restrictions on China’s access to chips. technology and plug holes in existing export controls.
Shares of China’s top chip stocks jumped on Monday. SMIC, China’s biggest chipmaker, rose as much as 5.4% in Hong Kong. Hua Hong Semiconductor Ltd, a smaller competitor, rose more than 6%.
–With help from Jessica Sui.
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