In a bid to strengthen its semiconductor sector, China has established a third state-backed investment fund, injecting a whopping $47.5 billion into the industry.
What Happened: The fund, officially known as the China Integrated Circuit Industry Investment Fund, was registered with a capital of 344 billion yuan ($47.5 billion), reported Reuters on Monday.
This move is in line with President Xi Jinping‘s emphasis on achieving semiconductor self-sufficiency in the wake of U.S. export control measures.
The fund’s third phase, also known as the “Big Fund,” was established on May 24 and is the largest of the three funds launched by the China Integrated Circuit Industry Investment Fund.
The Ministry of Finance is the largest shareholder with a 17% stake and paid-in capital of 60 billion yuan, followed by China Development Bank Capital with a 10.5% stake.
Seventeen other entities, including major Chinese banks, are listed as investors. The fund will focus on areas such as equipment for chip manufacturing and is considering hiring at least two institutions to invest the capital from the third phase.
Why It Matters: The move by China to bolster its semiconductor industry comes amid a global chip war. China has been taking several measures to reduce its reliance on foreign chip makers and boost its domestic AI chip purchases. This includes urging tech giants to shift away from foreign chip makers and forging ahead with better in-house AI chips.
Meanwhile, foreign chip makers like Nvidia are cutting prices of their flagship AI chips in China amid intensifying competition from local players like Huawei.
Image Via Shutterstock
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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