This third iteration of the “Big Fund” seeks substantial local and state enterprise contributions, underscoring China’s strategic shift towards semiconductor self-reliance.
The fund’s expansion, directed by China’s tech ministry, marks a concerted effort to leverage the nation’s vast semiconductor market potential, despite previous reliance on US technology for significant advancements.
The Big Fund, pivotal in China’s quest for chip autonomy, plans to finance a range of projects through a “fund of funds” structure, aiming to diversify investments and strengthen local firms.
Key stakeholders, including city governments and state-owned enterprises, are poised to inject billions, reflecting President Xi Jinping’s nationwide mobilization strategy. However, negotiations are ongoing, with the fundraising specifics subject to change. This strategic move comes as the US tightens export controls, urging allies to limit China’s access to crucial semiconductor technologies.
Since its inception in 2014, the Big Fund has been instrumental in supporting China’s semiconductor sector, amassing around $45 billion and backing numerous companies. Despite operating largely out of the public eye and facing scrutiny for accountability, the fund has enabled significant progress, such as SMIC’s development of a 7-nanometer processor.
With the launch of this third fund, China reinforces its commitment to breaking through technological barriers, spurred by international pressures and the imperative for innovation within its semiconductor industry.
