China allocates $47 billion to enhance its chip industry

China allocates $47 billion to enhance its chip industry

China has established a new investment fund to boost its semiconductor industry, according to official documents. Key investors in the fund include the Chinese finance ministry and six major banks. The fund has allocated CNY 344 billion (over $47 billion) for chip manufacturing equipment, as reported by Reuters.

This is the third phase of the China Integrated Circuit Investment Fund, which was officially established on Friday, May 24. It has been the biggest fund since 2014 and is known locally as the "Big Fund." According to Tianyancha, a Chinese company information database organization, the finance ministry is the key investor with a 17% stake and paid-in capital of CNY 60 billion.

The second-largest shareholder is China Development Bank Capital, with a 10.5% share. Five more banks, each contributing around 6% of the total capital, are the Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China, and Bank of Communications.

The Big Fund has already provided financing for SMIC and Hua Hong Semiconductor, two of China's largest chip foundries. The commitment of hundreds of billions of yuan underscores China's determination to achieve self-sufficiency in the advanced chip sector, especially in light of renewed U.S. export control measures.

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