China Invests $47.5 Bn in Chip Sector – Spiceworks News and Insights
China has set up a large semiconductor investment fund worth $47.5 Bn to bolster the development of the country’s domestic chip industry. Find out more about the development and what it means for the global semiconductor sector.
According to government agencies, China is moving forward with its plans to make its semiconductor industry self-sustaining with its largest semiconductor state investment fund. The fund, worth approximately 344 billion yuan or $47.5 billion, was developed in response to recent restrictions by the U.S. government on the export of chips and associated technology.
The investment comes from leading banks in the country, including the China Construction Bank, Agricultural Bank of China, Bank of Communications, Bank of China, and ICBC, with encouragement from President Xi Jinping to support China’s ambitions to become a global tech leader, including fields such as 5G wireless, artificial intelligence, and quantum computing.
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The $47.5 billion investment is the third part of the existing China Integrated Circuit Industry Investment Fund, initiated in 2014 with a 138 billion yuan ($19.2 billion) investment. The second phase of the fund was completed in 2019 with an investment of 204.1 billion yuan ($28.2 billion).
After the news was announced, the share values of leading Chinese chip manufacturers, such as Hua Hong Semiconductor and Semiconductor Manufacturing International Corporation (SMIC), rose by 13% and 7%, respectively.
While the fund will provide a major impetus to the domestic chip production sector, the Chinese government’s efforts are not without hurdles. In addition to the U.S. government’s export controls on Chinese companies, the sector has been impacted by restrictions by other European countries and internal corruption scandals that have hit the fund.
Assistant Editor – Tech, SWZD
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