China’s Big Fund Struggles to Secure $41 Billion for Semiconductors
China's semiconductor industry faces fundraising challenges, with the China Integrated Circuit Industry Investment Fund aiming for Rmb300bn ($41bn).
Despite its pivotal role in advancing the industry since 2014, economic difficulties hinder progress. The pandemic-induced financial strain on local governments contributes to cautious investment strategies.
The finance ministry played a significant role in funding the Big Fund’s first two phases, while local governments and state-owned enterprises also participated. U.S. restrictions on technology access make investment decisions more passive, limiting options.
The fund allocated over 30 percent of its second-phase capital for follow-on funding. An ongoing anti-corruption investigation has slowed investment activities, and capital from the second phase remains underutilized.
Despite challenges, the Big Fund remains committed to its five-year schedule. Analysts stress the importance of continuing the latest round.
It will focus on chipmaking equipment, contrasting with previous phases concentrated on semiconductor manufacturing.
China’s chipmakers increasingly rely on domestic equipment as the U.S. and its allies tighten restrictions on exporting advanced semiconductor production equipment to China.