China sets up largest-ever $47 billion chip fund

SHANGHAI: China has poured more than $47 billion into the country’s largest-ever chip investment fund, a business database showed on Monday, as Beijing seeks self-sufficiency in the crucial semiconductor manufacturing sector.

Semiconductors are an indispensable part of the modern economy, used in everything from kitchen appliances and mobile phones to cars and weapons.The chips industry is increasingly caught in the crossfire as the United States and China vie for technological supremacy, with relations between the world’s two largest economies deteriorating in recent years.

With Washington seeking to cut Chinese companies off from supply chains that give it access to advanced US technology, Beijing has ploughed billions into developing homegrown chipmakers.

China’s finance ministry as well as a host of state-owned banks and other businesses have invested 344 billion yuan ($47.48 billion) into the third phase of the National Integrated Circuit Industry Investment Fund, according to information published by business data provider Tianyancha on Monday.

The fund’s third phase, incorporated on Friday, is larger than the previous two iterations combined.An earlier phase had planned to invest 12.9 billion yuan in semiconductor manufacturer Yangtze Memory Technologies Co, Bloomberg reported last year.

China’s Ministry of Finance is the largest shareholder of the fund’s latest phase, according to Tianyancha, with state-owned companies from Shanghai, Beijing and southern tech hub Shenzhen also investing.