China: $40 Billion for the Chip Industry

by | 5. Sep 2023 - 11:30 | Economy

The investment is aimed at boosting the domestic chip sector.

Reuters news agency, citing insiders, reports that China raises nearly $40 billion (300 billion yuan) into its domestic chip industry under the “China Integrated Circuit Industry Investment Fund.” The country spent $21.8 billion and $29 billion under the same fund in 2014 and 2019, respectively, to expand and upgrade the domestic chip sector.

The background to the fund is the “Made in China 2025” agenda, a fundamental modernization of the Chinese economy and the pursuit of self-sufficiency and self-sufficiency in various industrial sectors. The chip industry is a central point where the country aims to become 70 percent self-sufficient by 2025. Until now, China has been dependent on imports, especially for the latest generation of chips. Domestic manufacturers have not yet been able to catch up with market leaders such as Samsung or TSMC. In connection with economic tensions between the People’s Republic and the U.S., China’s President Xi Jinping has been pushing for the independence of the domestic semiconductor industry for some time.

In October last year, the U.S. passed a far-reaching package of measures to restrict China’s access to cutting-edge chips and chip technologies. Japan and the Netherlands joined the U.S. steps.

Photo: iStock/gorodenkoff

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