Semiconductors

China’s Big Fund Bumps Up Investments in Chip Supply Chains

 

China’s semiconductor-focused state fund — the National Integrated Circuit Industry Investment Fund — is pouring billions into the country’s chip firms seeking more “technological breakthroughs”, state media reported.

The second phase of the Big Fund is looking to support not just chip manufacturing but also other elements of the semiconductor supply chain, including “design, equipment, components and raw materials,” state-run Global Times reported on Tuesday.

As part of the push, the Big Fund II is acquiring takes in major chip firms of the country, including Shanghai Huali Microelectronics Corp (HLMC) and Hangzhou Silan Microelectronics Co, the report said.

 

Also on AF: Nvidia ‘Working Closely With US Govt’ so China Chips Meet Curbs

 

HLMC is a maker of the most advanced semiconductors for Hua Hong Semiconductor Ltd and capable of manufacturing 28-22nm chips.

China’s Big Fund II has invested $1 billion into HLMC with an aim to support advanced chip development, Taiwanese newspaper DigiTimes reported on Tuesday. Additionally, the Global Times report said Big Fund II had become its shareholder in the chipmaker, citing Chinese data provider Tianyancha.

Meanwhile, the fund also is set to invest more than $211 million in Silan Microelectronics, Global Times said, citing an announcement by the chipmaker. The company, set-up in 1997, is a maker and designer of integrated circuits.

It also produces semiconductor discrete devices and light-emitting diode (LED) products. Big Fund II is the second-largest shareholder in Silan Microelectronics, Global Times said.

The Big Fund II has so far invested $8.5 billion (60 billion yuan) in more than “40 chip firms”, it added, citing a report by state media Securities Times.

The fund is also looking to invest in other emerging technologies including artificial intelligence (AI), 5G and intelligent automation, it said.

 

 

Push for greater chip self-sufficiency

Investments from the state-backed fund have picked up on the back of a chip war between China and the US, with Washington going all-out to cut China off of advanced AI chips.

US Commerce Secretary Gina Raimondo — who has been leading that push — said earlier she was determined to deny China access to cutting-edge semiconductors.

“We can’t let China get these chips. Period,” she said.

Export curbs by the US, and also its allies including Japan and the Netherlands, have forced Chinese chipmakers to cut their dependence on Western chip technology.

It has also fuelled efforts by Chinese chipmakers — most notably Huawei Technologies — to innovate and build their capabilities in chip manufacturing.

Those efforts have also started to bear fruit, as seen in Huawei’s breakthrough in developing 7nm chips, in partnership with state-backed chipmaker Semiconductor Manufacturing International Corporation (SMIC).

SMIC has been one of the biggest beneficiaries of the Big Fund and also Chinese state subsidies.

Building domestic chip supply chains is part of Chinese President Xi Jinping’s Made in China 2025 agenda which aims to develop 70% semiconductor self-sufficiency by 2025.

 

  • Vishakha Saxena

 

Also read:

 

China Plans $40bn Bonanza for Chips After Huawei Breakthrough

 

Nvidia’s Best New AI Chip for China ‘Delayed Until Next Year’

 

Tencent to Turn to Chinese Chips as US Bans Risk Cloud Service

 

Report Explains How China Got Round US’s Initial Chip Curbs

 

US Chip Export Ban Seen as Big Opportunity for Huawei

 

US Curbs Set Off Sales, Tech Boom for China Chip Equipment Firms

 

ASML to Ship Top Tech to China Even as Dutch Chip Ban Starts

 

China Needs Tech Self-Reliance to Avoid Being Strangled: Xi – SCMP

 

 

 

Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at vishakha.saxena@asiafinancial.com

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