China is reportedly considering the creation of a massive fund worth $27 billion to boost its semiconductor industry in response to escalating restrictions from the U.S. The China Integrated Circuit Industry Investment Fund, also known as the Big Fund, is looking to raise over RMB200 billion for its third vehicle, with contributions expected from local governments, state-run enterprises, and the central government.
Municipal governments, China Chengtong Holdings Group, and State Development and Investment Corp. are among the investors planning to inject billions of yuan into the Big Fund’s latest initiative. This new fund aims to provide direct support to local semiconductor firms and is expected to take some time to secure the necessary funding.
The move comes as the U.S. government tightens semiconductor export controls specifically targeting China. A recent rule introduced by the U.S. Department of Commerce focuses on restricting China’s access to high-end chips crucial for military applications. Nvidia and Advanced Micro Devices (AMD) have both faced challenges in exporting their AI chips to the Chinese market due to these restrictions.
Nvidia has developed a modified version of its flagship products for export to China, while AMD’s efforts to comply with the export curbs have been met with regulatory obstacles. Despite their attempts to introduce alternative chip versions tailored for the Chinese market, both companies have encountered hurdles in obtaining necessary licenses for their products.
This latest development highlights China’s efforts to bolster its semiconductor industry in the face of increasing U.S. restrictions, signaling a significant move by the country to counter the challenges posed by foreign regulations on key technological exports.
