Syed Imran Haider 
According to a recent filing, a third planned state-back investment fund has been set up in China. The aim of boosting the semiconductor industry.
A govern-run companies’ registry disclosed that the fund has a registered capital of about 344 billion yuan, which is around $47.5 billion.
The news
The semiconductor sector has received investments worth hundreds of billions of yuan. It highlights the aim of President Xi Jinping to achieve self-sufficiency for the country in semiconductors.
In fact, there is renewed urgency now because of the export control measures that have been imposed by the United States in recent years.
This is over fears that Beijing could boost its military capabilities with the use of advanced chips. There was a rise in Chinese chip shares over the news of the new fund.
There was a rally of over 3% in the CES CN Semiconductor Index. which was set to record its biggest day of gains in a month.
On May 24th, China Integrated Circuit Industry Investment Fund’s third phase was established. It was also revealed that the fund was registered with the Beijing Municipal Administration for Market Regulation.
The fund
The China Integrated Circuit Industry Investment Fund has launched three funds and its third phase is known as the ‘Big Fund’, as it is the largest of them all.
The finance ministry of China is the biggest shareholder. As it has paid-in capital of about 60 billion yuan and a share of 17%.
The second largest shareholder is China Development Bank, which has a stake of 10.5%. There are 17 more entities that have invested in the fund.
These include five major banks in China, each of which have contributed capital of about 6%.
These include Agricultural Bank of China, China Construction Bank, Bank of Communications. Bank of China and Industrial and Commercial Bank of China.
It had been reported back in September that China would launch the Big Fund’s third phase.
The background
In 2014, the first phase of the fund was established and it had a registered capital of about 138.7 billion yuan.
The second phase had then been established in 2019 and it had a registered capital of 204 billion yuan. The two biggest foundries in China have gotten their financing from the Big Fund.
These two foundries are Semiconductor Manufacturing International Corporation and Hua Hong Semiconductor.
Financing has also been provided to Yangtze Memory Technologies, a company that makes flash memory.
Apart from that, a number of funds and smaller companies have also received financing from the Big Fund.
Development equipment for chip manufacturing is one of the major aspects on which the third phase of the fund will focus on.
It had also been reported that the Big Fund was considering hiring at least two institutions to help in investing the capital from the third phase.
