The Chinese government aims to raise as much as 200 billion yuan (US$31.5 billion) to invest in homegrown chip companies and accelerate its ambition of building a world-class semiconductor industry, people familiar with the matter said.
The state-backed China Integrated Circuit Industry Investment Fund Co (國家集成電路產業投資基金) is in talks with government agencies and corporations to raise at least 150 billion yuan for its second fund vehicle, but is angling for up to 200 billion yuan, the people said, asking not to be identified talking about a plan that has not been publicized.
It intends to begin deploying capital in the second half of the year, they added.
The firm will again invest in a wide range of sectors from processor design and manufacturing to chip testing and packaging, potentially benefiting industry leaders from telecoms gear makers Huawei Technologies Co (華為) and ZTE Corp (中興) to major players such as the Tsinghua Group (清華).
The first round of money had gone toward more than 20 listed companies, including ZTE and contract chipmaker Semiconductor Manufacturing International Corp (中芯國際), the people said.
China is trying to reduce a reliance on about US$200 billion of annual semiconductor imports, which it fears undermines national security and hampers the development of a thriving technology sector.
It envisions spending about US$150 billion over 10 years to achieve a leading position in design and manufacturing, an ambitious plan that US executives and officials have said could harm US interests.
While officials have suggested their initial vision of attaining pole position in chips may have been unrealistic, the government remains intent on finding ways to reduce imports as the world’s largest consumer of semiconductors.
The secretive China IC Fund — established in 2014 with about 140 billion yuan of initial capital — plays a key role by steering overall investment and strategy.
For its second fund, the state-backed outfit will again turn to central and local government agencies, as well as the government-backed enterprises that contributed previously, the people said.
The Chinese Ministry of Industry and Information Technology did not respond to a faxed request for comment.
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