China is preparing to raise billions of dollars for its largest-ever semiconductor fund, aiming to fast-track the advancement of cutting-edge technologies in response to Washington's worsening trade and tech war.
According to Bloomberg, China's National Integrated Circuit Industry Investment Fund is pooling capital from local governments, their investment arms, and state-owned enterprises. Sources familiar with the situation said the fund is expected to collect more than 200 billion yuan, or $27 billion.
Referred to as the "Big Fund," the state-backed entity will help finance several pools of capital managed by other general partners under a "fund of funds" structure to increase deal sourcing and investment strategies to boost semiconductors and artificial intelligence investments. This comes as the Biden administration prepares to escalate technology trade curbs.
The people also said negotiations about the fundraising are progressing and subject to change, and it could take months to finalize.
Bloomberg pointed out that Big Fund will assist domestic companies, such as Huawei Technologies and Semiconductor Manufacturing International Corp, in becoming less reliant on advanced processors and semiconductor equipment from the US or Europe.
"Beijing's goal now is to pool valuable capital across the country for major projects, a key element in President Xi Jinping's "whole nation" approach," according to the source.
China's drive towards self-reliance follows the US and its allies, such as the Netherlands, Germany, South Korea, and Japan, ratcheting up trade restrictions on advanced semiconductor technology over the last year.
And just how reliant is Huawei on the US?
In a separate Bloomberg report earlier today, it was revealed that Huawei and SMIC relied on US technology to produce advanced 7-nanometer chips for the Mate 60 Pro released last year.
This suggests that China still can't entirely replace some foreign components from its most advanced chips.
The Big Fund is a clear move by Beijing to increase technological self-sufficiency from the West.
Meanwhile, the Biden administration is spending tens of billions of dollars to boost the US semiconductor industry and reduce its reliance on China.
All this simply reinforces the global shift to a multi-polar state.
China is preparing to raise billions of dollars for its largest-ever semiconductor fund, aiming to fast-track the advancement of cutting-edge technologies in response to Washington’s worsening trade and tech war.
According to Bloomberg, China’s National Integrated Circuit Industry Investment Fund is pooling capital from local governments, their investment arms, and state-owned enterprises. Sources familiar with the situation said the fund is expected to collect more than 200 billion yuan, or $27 billion.
Referred to as the “Big Fund,” the state-backed entity will help finance several pools of capital managed by other general partners under a “fund of funds” structure to increase deal sourcing and investment strategies to boost semiconductors and artificial intelligence investments. This comes as the Biden administration prepares to escalate technology trade curbs.
The people also said negotiations about the fundraising are progressing and subject to change, and it could take months to finalize.
Bloomberg pointed out that Big Fund will assist domestic companies, such as Huawei Technologies and Semiconductor Manufacturing International Corp, in becoming less reliant on advanced processors and semiconductor equipment from the US or Europe.
“Beijing’s goal now is to pool valuable capital across the country for major projects, a key element in President Xi Jinping’s “whole nation” approach,” according to the source.
China’s drive towards self-reliance follows the US and its allies, such as the Netherlands, Germany, South Korea, and Japan, ratcheting up trade restrictions on advanced semiconductor technology over the last year.
And just how reliant is Huawei on the US?
In a separate Bloomberg report earlier today, it was revealed that Huawei and SMIC relied on US technology to produce advanced 7-nanometer chips for the Mate 60 Pro released last year.
This suggests that China still can’t entirely replace some foreign components from its most advanced chips.
The Big Fund is a clear move by Beijing to increase technological self-sufficiency from the West.
Meanwhile, the Biden administration is spending tens of billions of dollars to boost the US semiconductor industry and reduce its reliance on China.
All this simply reinforces the global shift to a multi-polar state.
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