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China Invests $47.5 Billion to Combat US Semiconductor Measures

China is setting up its third state-sponsored fund, the $47.5 billion Big Fund, to boost its semiconductor industry and become self-sufficient in advanced chips in the US in terms of export control.

Dubbed the "Big Fund," the fund aims to help China become self-sufficient in advanced chips while allowing the U.S. to increase export controls aimed at the factory.

China’s Ministry of Finance is the largest investor in the bank, with a 17% stake and paid-up capital of 60 billion yuan. China Development Bank Capital is the second largest shareholder, with a 10.5% stake. Industrial and Commercial Bank of China, Construction Bank of China, Agricultural Bank of China, Bank of China and Communications Bank

Investment Fund, officially established on May 24, marks the largest of the three funds launched since 2014. The commitment of hundreds of billions of yuan highlights President Xi Jinping's drive to reduce China's dependence on foreign semiconductor technology, particularly in light of recent US export control measures citing concerns over potential military use of advanced chips. China's $47.5 billion Chip Industry Plan is a strategic move to neutralize U.S. actions aimed at restricting its access to advanced semiconductor technology.

Officially launched on May 24, the fund is the largest of three funds launched since 2014. The hundreds of billions of yuan underpin President Xi Jinping’s efforts to clean up China as he emphasizes his reliance on foreign semiconductor technology, particularly products that address concerns about potential military applications of advanced chips. China's $47.5 billion Chip Industry plan aims to bolster domestic semiconductor production and counteract US actions in the technology sector.

Big Fund has already financed SMIC and Hua Hong Semiconductor, China’s two largest chip foundries. Chinese chip shares surged after the new bank announcement, with the CES CN Semiconductor Index up more than 3%, set to post its biggest one-day gain in more than a month.

The fund was launched as part of China’s efforts to bolster its domestic semiconductor industry and reduce the influence of U.S. sanctions—half of the restrictions imposed on it.

As technological tensions between the two countries intensify, China’s push for advanced chips is expected to intensify, as big currencies play an important role in funding the industry's development.

Conclusion: China has launched its $47.5 billion Big Fund to boost its semiconductor industry and reduce its reliance on foreign technology as part of President Xi Jinping's efforts to neutralize US actions.