China's $47 Billion Chip Fund Gears Up Amidst US Trade Tensions
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China's massive state-backed investment fund for the domestic chip industry has begun deploying its 344 billion yuan ($47 billion) war chest, Nikkei Asia reports. This move comes as Beijing seeks to bolster its semiconductor supply chain in anticipation of potential US export restrictions under the incoming Trump administration.
The third phase of the China Integrated Circuit Industry Investment Fund, also known as the "Big Fund," launched a new fund on December 31, injecting 93 billion yuan in partnership with Huaxin Investment Management, a state-owned China Development Bank-backed firm. Huaxin, established in 2014 alongside the Big Fund, will manage the investments.
Chinese media reports indicate that Huaxin has already invested in a manufacturing group of leading domestic chipmaker Hua Hong Semiconductor, as well as Hangzhou Fuxin Semiconductor, a company specializing in power semiconductors.
The third phase of the Big Fund is expected to raise additional external capital, further supporting chip companies' capital investments. Potential investment targets include silicon wafers and other substrate materials.
Another new government-affiliated semiconductor fund was established in late 2024, injecting an additional 71 billion yuan and bringing the total third-phase investment to 164 billion yuan so far.
This significant investment underscores China's commitment to its "Made in China 2025" high-tech industry development plan, which prioritizes semiconductors. The first phase of the Big Fund allocated approximately 140 billion yuan, while the second phase invested around 200 billion yuan, according to Chinese media.
The final plan for the third phase remains undisclosed, but its registered capital of 344 billion yuan represents the largest investment to date for the Big Fund. This substantial investment reflects China's strategic objective of achieving technological self-sufficiency in semiconductors. This commitment is particularly notable given the potential for increased US trade restrictions under the new administration.