China’s government has launched a new state-controlled investment fund aimed at raising $40 billion U.S. for the country’s domestic semiconductor industry.
The new fund has been created and is being controlled by the China Integrated Circuit Industry Investment Fund, which is managed by China’s government in Beijing.
The funds $40 billion U.S. target surpasses similar funds created in 2014 and 2019 that also raised money to support China’s domestic technology sector.
The main area of investment under the new fund will be the manufacturing of microchips and semiconductors, according to multiple media reports.
Chinese President Xi Jinping has stressed the need for China to achieve self-sufficiency in semiconductors and lessen its reliance on foreign foundries and technologies.
The importance of domestic self-sufficiency has become more acute since the U.S. government imposed a series of export controls on American chip and semiconductor companies, citing fears that Beijing could use advanced chips to enhance its military capabilities.
Last year, the U.S. government brought in sweeping sanctions that cut China's access to advanced chipmaking equipment from American sources.
The fundraising process will likely take months to complete. Backers of the two previous tech funds included China’s finance ministry, as well as state-owned companies such as China National Tobacco and China Telecom.
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