VCG/Getty Images
On March 1, 2023, an employee operates a machine in a dust-free workshop at a semiconductor factory in Siyang County, Suqian City, Jiangsu Province, China.
Hong Kong
CNN
—
China is stepping up its plans for domination According to information released by a government agency, China plans to establish the largest-ever semiconductor national investment fund to invest in future cutting-edge technologies.
The fund, worth $47.5 billion, was created as the United States imposes sweeping restrictions on the export of American-made chips and chip technology. To thwart Beijing’s ambitions.
The fund has received investment from six of the country’s largest state-owned banks, including Industrial and Commercial Bank of China and China Construction Bank, underscoring efforts by Chinese President Xi Jinping to strengthen China’s position as a tech superpower.
In its “Made in China 2025” roadmap, Beijing has set out a goal for China to become a global leader in a wide range of industries, including artificial intelligence (AI), 5G wireless and quantum computing.
Latest investment vehicles This is the third batch of the China Integrated Circuit Industry Investment Fund. The so-called “Big Fund” was officially launched in Beijing on Friday, according to the National Enterprise Credit Information Disclosure System.
The first phase of the fund was established in 2014 with 138.7 billion yuan ($19.2 billion). The second phase was established five years later, with registered capital of 204.1 billion yuan ($28.2 billion).
investment When it launched the first phase in 2014, the Ministry of Industry and Information Technology said it aimed to bring the country’s semiconductor industry up to international standards by 2030, with funding mainly focused on chip manufacturing, design, equipment and materials.
“Big funds” take a hit Due to recent corruption scandals. China’s corruption watchdog began cracking down on the semiconductor industry in 2022, investigating several executives at state-owned semiconductor companies. The former chief executive of SinoIC Capital, who ran a “big fund,” Jun Li, was investigated and indicted on bribery charges in March, according to a statement from China’s top prosecutor.
These scandals are not the only obstacles that could seriously undermine President Xi Jinping’s ambitions to achieve technological self-reliance in China.
In October 2022, the United States announced sweeping export controls that would ban Chinese companies from buying advanced semiconductors and semiconductor-making equipment without a license. The Biden administration is also pressuring allies, including the Netherlands and Japan, to enact their own restrictions.
The Chinese government fought back last year by imposing export controls on two strategic raw materials crucial to the global semiconductor manufacturing industry.
The new semiconductor fund is not just a defensive measure against Western sanctions, but also part of President Xi’s long-held ambition to make China a global technology leader.
China’s Huawei shocked industry experts last year when it unveiled a new smartphone equipped with a 7-nanometer processor made by China’s Semiconductor Manufacturing International Corporation (SMIC).
When Huawei’s phones were launched, analysts couldn’t understand how the company would have the technology to make such chips after U.S. efforts to drastically restrict China’s access to foreign technology.
Meeting with Dutch Prime Minister Mark Rutte in March, Xi said that “no force can stop China’s scientific and technological development.”
The Netherlands is home to ASML, the world’s only manufacturer of extreme ultraviolet lithography equipment needed to make advanced semiconductors. The company said in January that it had been banned by the Dutch government from exporting some of its lithography equipment to China.
