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China plans to start a new state-backed fund aimed at supporting the country’s semiconductor industry. The US has attempted to limit China’s chip production, but it may not be effective. The $41 billion fund that China is planning will focus on fostering silicon manufacturing as the country tackles sanctions that cut its access to advanced manufacturing equipment.
The state-backed initiative from China’s Integrated Circuit Industry Investment Fund is the third such effort from the government. In 2014 and 2019, the previous two funds raised 138.7 billion yuan ($19 billion) and 200 billion yuan ($27 billion), respectively.
China’s finance ministry is expected to contribute about 60 billion yuan ($8 billion) to the fund, with other contributors yet to be announced. Past backers have included China Telecom and China National Tobacco Corporation.
Chinese President Xi Jinping has emphasised the importance of achieving self-sufficiency in the production of semiconductors. The fund will focus primarily on developing tools and instruments for the purpose of chip manufacturing.
Over the last few years, the US government has put in curbs to restrict China’s access to advanced chip-making equipment due to concerns that China could use advanced chips to enhance its military capabilities. Similarly, U.S. allies Japan and the Netherlands have also taken steps to restrict China’s access to such equipment.
Recently, Chinese electronics giant, Huawei launched its new smartphone, the Mate 60 Pro, which is powered by a homegrown chip. Huawei has reportedly partnered with chipmaker Semiconductor Manufacturing International Corp (SMIC) to develop the Kirin 9000s chip that powers the new smartphone. According to a report from analysis firm TechInsights, the Kirin 9000S is built on SMIC’s advanced 7nm node.
The US government-imposed export should have pushed back the country by eight years in accessing the most advanced technology. However, the production of 7nm chips demonstrates the country’s ability to manufacture chips that are at least five years behind the most advanced technology.
The state-backed initiative from China’s Integrated Circuit Industry Investment Fund is the third such effort from the government. In 2014 and 2019, the previous two funds raised 138.7 billion yuan ($19 billion) and 200 billion yuan ($27 billion), respectively.
China’s finance ministry is expected to contribute about 60 billion yuan ($8 billion) to the fund, with other contributors yet to be announced. Past backers have included China Telecom and China National Tobacco Corporation.
Chinese President Xi Jinping has emphasised the importance of achieving self-sufficiency in the production of semiconductors. The fund will focus primarily on developing tools and instruments for the purpose of chip manufacturing.
Over the last few years, the US government has put in curbs to restrict China’s access to advanced chip-making equipment due to concerns that China could use advanced chips to enhance its military capabilities. Similarly, U.S. allies Japan and the Netherlands have also taken steps to restrict China’s access to such equipment.
Recently, Chinese electronics giant, Huawei launched its new smartphone, the Mate 60 Pro, which is powered by a homegrown chip. Huawei has reportedly partnered with chipmaker Semiconductor Manufacturing International Corp (SMIC) to develop the Kirin 9000s chip that powers the new smartphone. According to a report from analysis firm TechInsights, the Kirin 9000S is built on SMIC’s advanced 7nm node.
The US government-imposed export should have pushed back the country by eight years in accessing the most advanced technology. However, the production of 7nm chips demonstrates the country’s ability to manufacture chips that are at least five years behind the most advanced technology.
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