China Plans Fund To Help Chip Industry

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China Plans Fund To Help Chip Industry

China Plans A $40 Billion Fund To Help Chip Industry

Media reports reveal that China plans to start an investment fund worth $40 billion that will be used to help the semiconductor sector. This will allow the chip industry of China to catch up with its rivals, especially those from the USA.

If we take a look back, the sheer size of this fund makes it one of the 3 biggest funds to be launched by China for the chip industry. Overall, the country is planning to pour in $41 billion or 300 billion yuan, which will make it bigger than the funds from 2014 & 2019.

In the last 10 years, the government raised around 200 billion Yuan and 138.7 billion Yuan, which means the recent investment fund is on a totally different scale.

Self-Sufficiency Of China In Chip Manufacturing

One of the major areas where the investment will go is the chip manufacturing equipment. In simple words, the equipment that's used for chip manufacturing will receive the bulk of the investment fund.

It's been a long time since the Chinese president has stressed the need for the country to become self-sufficient in chips (semiconductors). After the recent sanctions from the West on the export of semiconductors to China, this need has increased tremendously.

A few months back, the US launched a series of sanctions in an attempt to block China from accessing chipmaking equipment. Similarly, other countries such as the Netherlands and Japan also took similar steps.

According to one other source, the Finance Ministry of China is planning to spend close to 60 billion yuan. As for where the rest of the funds come from, it was not immediately clear.

It is still not clear whether the country plans to use the funds to buy chip manufacturing equipment from other countries or use it for the R&D process to become self-sufficient in this department. However, the one thing that becomes clear from this move is that China is really serious about taking the lead in the chips race.

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