China has set up the country’s largest-ever semiconductor investment fund to propel development of the domestic chip industry, the latest effort from Beijing to achieve self-sufficiency as the US seeks to restrict its growth.
China has set up its third planned state-backed investment fund to boost its semiconductor industry, with a registered capital of 344 billion yuan ($47.5 billion), according to a filing with a government-run companies registry.The hundreds of billions of yuan invested in the sector puts
into perspective President Xi Jinping's drive to achieve self-sufficiency for
China in semiconductors.
That commitment has taken on renewed urgency after the U.S.
imposed a series of export control measures over the last couple of years,
citing fears Beijing could use advanced chips to boost its military
capabilities.
Chinese chip shares rose, with the CES CN Semiconductor
Index rallying more than 3% and set to log the biggest one-day gain in more
than a month.
The third phase of the China Integrated Circuit Industry
Investment Fund was officially established on May 24 and registered under the
Beijing Municipal Administration for Market Regulation, according to the
National Enterprise Credit Information Publicity System, a government-run
credit information agency.
The third phase will be the largest of the three funds
launched by the China Integrated Circuit Industry Investment Fund, known as the
"Big Fund."
China's finance ministry is the biggest shareholder with a
17% stake and paid-in capital of 60 billion yuan, according to Tianyancha, a
Chinese companies information database company. China Development Bank Capital
is the second-largest shareholder with a 10.5% stake.
The Ministry of Finance didn't immediately reply to Reuters
request for comment.
Seventeen other entities are listed as investors, including
five major Chinese banks: Industrial and Commercial Bank of China, China
Construction Bank, Agricultural Bank of China, Bank of China, and Bank of
Communications, with each contributing around 6% of the total capital.
Reuters reported in September that China would launch the
third phase of the Big Fund.
The first phase of the fund was established in 2014 with
registered capital of 138.7 billion yuan, and the second phase followed in 2019
with 204 billion yuan.
The Big Fund has provided financing to China's two biggest
chip foundries, Semiconductor Manufacturing International Corporation, and Hua
Hong Semiconductor, as well as to Yangtze Memory Technologies, a maker of flash
memory and a number of smaller companies and funds.
One of the major areas the third phase of the fund will
focus on is equipment for chip manufacturing, Reuters reported in September.
Also, the Big Fund is considering hiring at least two institutions to invest
the capital from the third phase.