China Creates $47.5 Billion Investment Fund to Boost Chip Sector: Media Report

A worker checks a mobile phone chip at an electronics product research and development company in Ningbo, east China’s Zhejiang province, Feb. 22, 2024. The company’s products are exported to more than 80 countries in Europe and Latin America, and its overseas order book is full by Feb. quarter of 2024. Photo. VCG

China’s Ministry of Finance (MoF) and others have set up an investment fund to boost the development of the semiconductor industry, according to media reports, as the country seeks to strengthen its self-reliance in key technologies in the face of growing protectionism and restrictions imposed by the US on Monday.

The fund, with registered capital of 334 billion yuan ($47.5 billion), underscores China’s strong determination and belief in supporting the semiconductor industry and will accelerate technological breakthroughs, particularly in the production of advanced chips, industry experts say.

As reported by the new outlet stcn.com, citing information from the National Enterprise Credit Information Advertising System, the third phase of the China Integrated Circuit Industry Investment Fund was established on May 24.

The report shows that six Chinese state-owned banks, including Industrial and Commercial Bank of China and Bank of China, have equity capital of 37.06%.

The latest addition to the investment fund comes as the United States continues to impose restrictions on sales of chips and related products to China in a nefarious attempt to rein in China’s technological development. But experts said the fund showed China’s resolute determination and confidence in the country’s chip industry.

“The establishment of a national fund to support the semiconductor industry inspires confidence across the industry, indicating that the country has strong financial resources and technical support and is committed to chip independence. Continuing to convey confidence and determination is crucial for the industry’s development,” Ma Jihua, an experienced telecommunications industry observer, told the Global Times on Monday.

Ma said that despite years of repression by the United States, China’s chip industry had not stopped growing but was instead expanding rapidly. “The continuous increase in investments in the country will further increase confidence in the industry, and will also make the US aware of the need to withdraw from its campaign,” the expert said.

Global times