The “Big Fund” has already provided financial support to two of China’s major chip manufacturers — Semiconductor Manufacturing International Corporation and Hua Hong Semiconductor, according to a Reuters report.
The investment fund is also expected to finance the High Bandwidth Memory (HBM) industry and other key AI semiconductor fields, as per Chinese corporate information service, Qichacha.
While specific targets remain undisclosed, the fund in the third phase is expected to focus on AI-related semiconductors and manufacturing equipment. The fund also aims to support R&D projects and assist major Chinese semiconductor companies in transitioning from international to domestic suppliers for key materials like chemicals, industrial gasses, and silicon wafers. This move will minimize China’s reliance on foreign suppliers and potentially weaken the effectiveness of future US restrictions.
This move comes as the US tightens export controls on advanced chips and fabrication tools to hinder China’s tech advancements.
In October 2022, the US implemented comprehensive export controls to curb China’s military modernization by restricting access to advanced AI chips that use US technology. Again in 2023, the Bureau of Industry and Security updated these rules to address loopholes that compromised their effectiveness.
“Today’s updated rules will increase the effectiveness of our controls and further shut off pathways to evade our restrictions. These controls maintain our clear focus on military applications and confront the threats to our national security posed by the PRC Government’s military-civil fusion strategy,” Secretary of Commerce Gina M. Raimondo said in a statement in 2023. “As we implement these restrictions, we will keep working to protect our national security by restricting access to critical technologies, vigilantly enforcing our rules, while minimizing any unintended impact on trade flows.”
