China to Invest $40 Billion in Semiconductor Industry
According to Reuters, despite the United States’ ongoing attempts to restrict China’s chip manufacturing, their efforts may not yield significant results. China intends to establish a fund with the aim of strengthening its semiconductor sector. This state-supported initiative, which marks the third fund from the China Integrated Circuit Industry Investment Fund, seeks to generate 300 billion yuan ($41 billion) in funding. In 2014 and 2019, the previous two funds successfully raised 138.7 billion yuan ($19 billion) and 200 billion yuan ($27 billion) respectively.
About 60 billion yuan ($8 billion) is expected to come from China’s Ministry of Finance. Other contributors are not yet known, although previous supporters were China Telecom and China National Tobacco Corporation. A large part of the fund itself is specifically focused on creating instruments for chip manufacturing.
The news comes just days after Chinese electronics company Huawei unveiled its new smartphone, the Mate 60 Pro, equipped with home-made chips. Huawei teamed up with chipmaker Semiconductor Manufacturing International Corp (SMIC) to create the new Kirin 9000s chip, according to a report by analyst firm TechInsights. SMIC’s high-end 7nm technology appears to provide the Mate 60 Pro with charging speeds that are faster than typical 5G phones.
The entire announcement of the Mate 60 Pro and subsequent evidence of its power is in direct opposition to efforts by the US, Japan, and the Netherlands to limit the availability of Chinese chips and limit their production capabilities. Back in August, President Biden signed an executive order further restricting investment in Chinese companies working on technologies such as semiconductors. Previous restrictions have targeted Huawei in particular, including a ban in January on licenses to export US technology to the Chinese company.
