China allocates $47 billion to develop its chip industry

According to official documents, China has set up a new investment fund to develop its semiconductor industry. The Chinese Ministry of Finance and six major banks are the key investors in the fund, which has allocated 344 billion yuan (over $47 billion) for chip manufacturing equipment.

Here's What We Know

This is the third phase of the China Integrated Circuit Investment Fund, which was officially launched on 24 May. It was the largest fund since 2014 and is known locally as the "Big Fund". According to Tianyancha, a database organisation for Chinese companies, the Ministry of Finance is the key investor with a 17% stake and paid-up capital of RMB 60 billion.

The second largest shareholder is China Development Bank Capital with a 10.5% stake. The other five banks, each accounting for about 6% of the total capital, are the Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China and Bank of Communications.

China's Big Fund for the Development of Semiconductor Integrated Circuits has provided financing to two of the country's major chip foundries, SMIC and Hua Hong Semiconductor. These companies are key in China's semiconductor manufacturing industry.

Source: Reuters