China Piles $47.5 Billion Into ‘Big Fund III’ to Boost Chip Development

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The National Integrated Circuit Industry Investment Fund, better known as the Big Fund, is a central part of Beijing’s blueprint to develop a semiconductor industry

China is pumping another 344 billion yuan ($47.5 billion) into a state-backed semiconductor industry investment fund to drive its chip industry development amid an escalating technology race with the United States.

The third phase of National Integrated Circuit Industry Investment Fund has been set up with investments from 19 state-owned investors led by the Ministry of Finance, business registration records show. The fund will engage in equity investment and asset management in the integrated circuit industry

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China is investing 344 billion yuan ($47.5 billion) in the third phase of its National Integrated Circuit Industry Investment Fund to boost its semiconductor industry amid tensions with the U.S.
The fund, also known as the Big Fund, initiated in 2014, now faces a reset due to corruption probes involving former executives.
Big Fund III aims to address critical bottlenecks in the semiconductor sector, with significant investments from various state-owned entities and banks.

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Who’s Who

Huawei Technologies Co. Ltd.: Huawei Technologies Co. Ltd. is a Chinese tech company targeted by Washington's export controls. The National Integrated Circuit Industry Investment Fund, also known as the Big Fund, is central to Beijing’s efforts to develop a semiconductor industry to counter these restrictions.

China Construction Bank (CCB): China Construction Bank (CCB), one of the big four state-owned lenders, has committed to investing 21.5 billion yuan in the Big Fund III, amounting to 6.25% of the fund. The bank stated that the investment will be fully paid within 10 years of the fund’s registration.

China Development Bank Capital Co. Ltd.: China Development Bank Capital Co. Ltd. owns 10.47% of the third phase of the National Integrated Circuit Industry Investment Fund, also known as the Big Fund. Additionally, China Development Bank, the policy lender, owns 45% of Sino IC Capital Co. Ltd., the fund manager responsible for carrying out investments and managing the fund's money.

Shanghai Guosheng Group Co. Ltd.: Shanghai Guosheng Group Co. Ltd. owns 8.72% of the third phase of China's National Integrated Circuit Industry Investment Fund, also known as the Big Fund. The company is one of the 19 state-owned investors participating in this fund, which aims to develop China's semiconductor industry amidst technological competition with the United States.

Semiconductor Manufacturing International Corp. (SMIC): Semiconductor Manufacturing International Corp. (SMIC) is one of the industry leaders supported by the National Integrated Circuit Industry Investment Fund (the Big Fund). The Big Fund has made both direct and indirect investments in SMIC to boost its growth. SMIC is a key player in China's efforts to foster a self-reliant semiconductor industry amid escalating tech competition with the United States.

Hua Hong Semiconductor Ltd.: Hua Hong Semiconductor Ltd. is one of the industry leaders backed by the National Integrated Circuit Industry Investment Fund, also known as the Big Fund. The company has benefited from the fund's extensive portfolio of direct and indirect investments aimed at propelling China's semiconductor industry.

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