Aiming to bolster and maintain China’s predominance in the global semiconductor sector, Shanghai state has elevated its ‘Big Fund’ to almost $2 billion.
The Shanghai government has reportedly increased its domestic chip investment fund, now totalling approximately CNY 14.5 billion, which is equivalent to $2 billion. According to local news reports, the move will strengthen China’s position in the semiconductor market, especially given the growing demand for advanced AI chips.
There are also reports that this latest funding round, supported by state-backed companies in Shanghai, saw contributions of CNY 6.9 billion.
The Shanghai Semiconductor Industry Investment Fund, launched in 2016 as a part of China’s broader semiconductor strategy, received a substantial boost of $47.5 billion in May 2024. This funding, alongside the earlier rounds, is managed through the China Integrated Circuit Industry Investment Fund, commonly known as the ‘Big Fund.’
It has previously invested in significant players such as Semiconductor Manufacturing International Corp (SMIC) and Shanghai Huali Microelectronics. The first phase of this fund allocated 138.7 billion yuan, followed by a second phase in 2019 with 204 billion yuan.
Regarding the Shanghai fund’s distribution, Shanghai Science & Technology Venture Capital Group holds the largest share at 35%. Shanghai Guosheng Group and Shanghai International Group each have an 18% stake. Pudong Venture Capital has recently joined as a new investor with a 10.6% share, and existing investors have increased their contributions.
In May, South Korean President Yoon Suk Yeol described the global semiconductor industry as a state of warfare, referring to Chinese supremacy and its competitors.
As a key industry player, South Korea has pledged $19 billion to its semiconductor sector, focusing on chip design and contract manufacturing. Meanwhile, under the European Chips Act, Belgium’s R&D centre imec announced 2.5 billion euros ($2.72 billion) in funding for European research labs.
Additionally, in response to China’s market dominance, the U.S. is also actively seeking proposals to advance semiconductor manufacturing technologies, including digital twins, for various processes.
