The new fund seeks to enhance semiconductor self-reliance by diversifying investments and navigating U.S. technology restrictions. This strategic move aims to address challenges in the semiconductor industry, particularly amid geopolitical tensions and technology curbs. The fund is positioned to support initiatives that contribute to the development and independence of semiconductor technologies.
The third iteration of the “Big Fund” underscores China’s strategic shift toward semiconductor self-reliance by seeking substantial contributions from local and state enterprises. This reflects a concerted effort to bolster domestic capabilities in semiconductor technology and reduce reliance on external sources, aligning with broader national goals.
The expansion of the “Big Fund,” spearheaded by China’s tech ministry, represents a strategic shift towards achieving semiconductor self-reliance within the nation. Historically, China has been reliant on U.S. technology for significant advancements in the semiconductor industry. However, this initiative underscores a concerted effort to leverage the vast potential of China’s semiconductor market by encouraging substantial local and state enterprise contributions to the fund. By doing so, the aim is to foster domestic capabilities, reduce dependence on foreign technology, and navigate potential technology curbs imposed by the United States.
The Big Fund, crucial to China’s pursuit of semiconductor autonomy, is set to finance various projects through a “fund of funds” structure. This approach aims to diversify investments and enhance the capabilities of local firms within the semiconductor industry. By supporting a range of projects, the fund seeks to contribute to the development and self-sufficiency of China’s semiconductor sector, aligning with the broader goal of reducing reliance on external technology sources.
Key stakeholders, including city governments and state-owned enterprises, are anticipated to contribute significant funds, amounting to billions, in alignment with President Xi Jinping’s nationwide mobilization strategy. The ongoing negotiations will determine the final details of the fundraising, reflecting China’s commitment to advancing its semiconductor industry amid tightening export controls by the US. With the US urging allies to restrict China’s access to vital semiconductor technologies, this initiative underscores China’s strategic shift towards self-reliance in the semiconductor sector.
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.
In launching this third fund, China is reinforcing its commitment to surmount technological barriers within the semiconductor industry. Faced with international pressures and a growing imperative for innovation, the fund exemplifies China’s strategic push toward achieving semiconductor self-reliance. This initiative becomes crucial amid tightened export controls by the United States, urging allies to restrict China’s access to essential semiconductor technologies. The fund, operating under a “fund of funds” structure, aims to diversify investments, strengthen local firms, and navigate the challenges posed by U.S. technology curbs.
With key stakeholders, including city governments and state-owned enterprises, poised to inject billions, this strategic move aligns with President Xi Jinping’s nationwide mobilization strategy.While negotiations are ongoing, the fund’s expansion signals a concerted effort to leverage China’s vast semiconductor market potential and reduce dependence on U.S. technology for significant advancements. The Big Fund, established in 2014, has played a pivotal role in supporting China’s semiconductor sector, accumulating around $45 billion and contributing to significant developments, such as SMIC’s 7-nanometer processor.