China has established its third planned state-backed investment fund to support its semiconductor industry, with a registered capital of 344 billion yuan ($47.5 billion). This move was disclosed in a filing with a government-run enterprises registry.
President Xi Jinping’s ambition for China to become self-sufficient in semiconductors is placed into perspective by the hundreds of billions of yuan invested in the industry.
In the last few years, the United States has implemented a number of export restriction measures due to concerns that Beijing may utilize these cutting-edge semiconductors to enhance its military capabilities. Consequently, this pledge has become even more urgent.
The CES CN Semiconductor Index surged over 3%, registering the largest one-day rise in over a month, as Chinese chip equities increased.
The government-run credit information agency National Enterprise Credit Information Publicity System reports that the third phase of the China Integrated Circuit Industry Investment Fund was formally established on May 24. It was registered under the Beijing Municipal Administration for Market Regulation.
Known as the “Big Fund,” the China Integrated Circuit Industry Investment Fund is launching three funds, the largest of which will be the third phase.
According to Tianyancha, a Chinese enterprise information database company, the Ministry of Finance of China holds the largest stake, owning 17% and having paid-in capital of 60 billion yuan. With a 10.5% stake, China Development Bank Capital is the second-largest stakeholder.
When Reuters asked the Ministry of Finance for comment, it didn’t immediately respond.
Seventeen other corporations have been identified as investors. Among them are five prominent Chinese banks: China Construction Bank, Agricultural Bank of China, Bank of China, Bank of Communications, and Industrial and Commercial Bank of China. These banks have contributed around 6% of the total capital.
In September, Reuters announced that China would begin the Big Fund’s third phase.
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