This latest investment will fund equipment for chip manufacturing in China
China is further funding its semiconductor industry, with a third state-backed investment, according to published reports. This latest round of funding was officially established on May 24 and totals 344 billion yuan ($47.5 billion) with a focus on equipment for chip manufacturing.
Like the first two rounds of chip funding, this one is also part of the China Integrated Circuit Industry Investment Fund, first established in 2014 and known as the “Big Fund.” The first phase of the fund distributed 138.7 billion yuan, followed by a second round of funding in 2019 that came to 204 billion yuan. In addition to the country’s finance ministry — which has a 17% stake — there are seventeen other investors, five of which are major Chinese banks.
Notable fund recipients include chip foundries Semiconductor Manufacturing International Corporation and Hua Hong Semiconductor.
Last week, South Korea’s President Yoon Suk Yeol characterized the international semiconductor space as “all-out warfare.” And it’s true that China is not alone in investing billions to ensure it remains on top, particularly as the growing need for advanced chips in areas like AI is becoming clear. South Korea, for instance, announced $19 billion in funding for the nation’s semiconductor businesses with an emphasis on chip design and contract manufacturing, while Belgium’s nanoelectronics R&D hub imec announced that research labs in Europe will receive 2.5 billion euros ($2.72 billion) in funding under the European Chips Act, announced in 2023. Earlier this month, China’s biggest rival — the U.S. — said it’s seeking proposals from eligible applicants for the development, validation and use of digital twins for semiconductor manufacturing, advanced packaging, assembly and test processes.
