In October, the US imposed a sweeping sanctions package that cut off China’s access to advanced chip-making equipment, and US allies Japan and the Netherlands have taken similar steps.
China is set to launch a new state-backed investment fund. It aims to raise about $40 billion for its semiconductor sector as the country ramps up efforts to catch up with the US and other rivals. It is likely to be the largest of the three funds launched by the China Integrated Circuit Industry Investment Fund, also known as the Big Fund. Its 300 billion yuan ($41 billion) target is higher than similar funds in 2014 and 2019, which raised 138.7 billion yuan and 200 billion yuan, respectively, according to government reports.
A key area of investment will be equipment for chip manufacturing, said one of the two people and a third person familiar with the matter. President Xi Jinping has long stressed the need for China to achieve self-sufficiency in semiconductors. That need has grown even more pronounced after Washington imposed a series of export control measures over the past few years, citing fears that Beijing could use advanced chips to bolster its military capabilities.
In October, the US imposed a sweeping sanctions package that cut off China’s access to advanced chip-making equipment, and US allies Japan and the Netherlands have taken similar steps. The two people said the new fund had been approved by Chinese authorities in recent months. China’s finance ministry plans to contribute 60 billion yuan, said one person. Other contributors were not immediately known. All the sources declined to be identified as the discussions are confidential.