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It looks as though the competition in chip manufacturing between the U.S. and China is only getting started.
China’s strategy after it was announced this week that Beijing is going to be launching a new, $40 billion investment fund backed by the government, to help boost and subsidize its Chip industry.
This investment will be the largest of three that have been launched by China’s “Big Fund”, the nickname for the China Integrated Circuit Industry Investment Fund, according to Yahoo Finance. Its focus is going to be on “investment on equipment used in manufacturing advanced chips”.
Other “Big Fund” funds were launched in 2014 and 2019, with funding provided by companies like China Development Bank Capital, China National Tobacco Corp. and China Telecom.
Semiconductor Manufacturing International Corp. and Hua Hong Semiconductor have been beneficiaries of the “Big Fund” in the past, as has flash memory chipmaker Yangtze Memory Technologies, Yahoo reports.
The fundraising process “may take months”, according to the report, and it is unclear when China may launch the fund.
China is aiming to be self-reliant when it comes to chipmaking at the same time the U.S. has tried to limit the country from accessing advanced chips.
Chinese President Xi Jinping’s domestic push for semiconductors comes after the U.S. government’s CHIPS act was launched, providing $39 billion in manufacturing subsidies specifically targeting high end chip production in the U.S.
The global semiconductor industry remains weighed down by regulation: as of now China has imposed restrictions on Micron and the U.S. has put into place export controls that have caused some companies difficulty in selling to China.