China is raising over $27 billion for its largest-ever chip fund to accelerate the development of cutting-edge technology, in a bid to counteract U.S. efforts to hinder its rise.
Informed sources revealed that the National Integrated Circuit Industry Investment Fund is raising funds from local governments and state-owned enterprises for its third fund, which will exceed the 200 billion yuan of the second fund.
As the U.S. prepares to significantly upgrade its technology restrictions aimed at curbing China’s chip and artificial intelligence advancements, this government-backed company, known as the “Big Fund,” is expanding its scope of authority.
An informed source stated that most of the funds for the third phase of the Big Fund are expected to come from local governments, investment agencies of local governments, and state-owned enterprises, with only a small portion coming from the central government. The source mentioned that Beijing’s current goal is to pool valuable funds nationwide for major projects.
This secretive Big Fund is the main tool for providing financial support to China’s domestic chip manufacturers. Established in 2014, it has raised about $45 billion and supported dozens of companies, including domestic chip manufacturing leaders SMIC and Yangtze Memory Technologies Co., Ltd.
The second phase of the fund was established in 2019 and currently holds shares in 48 domestic chip companies. According to data from the enterprise database Tianyancha, this joint pool was established in 2014 and has shareholders in 74 companies and startups.
Entities receiving funds from the Big Fund are considered to have official recognition from Beijing. This typically helps to open doors to other potential investors and gain more policy support.
At the end of last year, the Big Fund took action again, investing more than ten billion yuan in ChangXin Newbridge Memory Technology Co., Ltd., which was established two years ago.
According to Tianyancha, the obscure ChangXin Newbridge, established in 2021, shares some shareholders and the general manager with China’s leading DRAM chip manufacturer ChangXin Memory Technologies Inc., which is also based in the eastern Chinese city of Hefei.
The specific investment focus and objectives of the third fund of the China Integrated Circuit Industry Investment Fund (Big Fund) are mainly to accelerate the development of the domestic semiconductor industry. According to two informed sources, the third phase of the Big Fund plans to raise $40 billion, making it the largest of the three funds in terms of capital scale.
Moreover, based on the investment situations of the first and second phases of the Big Fund, it mainly focuses on promoting the development of the integrated circuit industry, including but not limited to the semiconductor equipment sector.
Therefore, it can be inferred that the third phase of the Big Fund will continue this investment direction, focusing on key links and technological advancements in the semiconductor industry chain, to support the rapid development and independent innovation of the domestic semiconductor industry.
The specific investment direction and objectives of the third fund of the China Integrated Circuit Industry Investment Fund (Big Fund) are to accelerate the domestic semiconductor development process, with a focus on key links and technological advancements in the semiconductor industry chain, to promote the overall development of the integrated circuit industry.
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