China Will Have $45-70 Billion in Funds to Catch Up With Semiconductors

China’s first Big Fund to invest in semiconductors was made in 2014 with around $19-22 billion. The Phase 2 fund is being put together now and is already at $28.9 billion and could reach $47 billion. The fund is called the National Integrated Circuit Industry Investment Fund Phase II Co., Ltd. (National Big Fund Phase II).

At a September semiconductor industry summit, the Big Fund’s manager revealed that Phase II will focus on etching machines and film, test and cleaning equipment. The goal is to build an independent, self-sufficient and “controllable” industrial chain for the Chinese IC industry.

By the end of September 2018, the Phase I had invested in 77 projects and 55 integrated circuit enterprises.

The Ministry of Finance with 22.5 billion yuan (with $3.18 billion) is the largest shareholder, local governments are also transferring funds.

Shareholders include China’s Ministry of Finance, Shanghai Guosheng (Group) Co., Ltd., China National Tobacco Corporation, China Telecom, and a host of local investment funds.

China is lagging badly in semiconductor technology and is dependent on the US and Europe for this technology. China imported US$260 billion worth of semiconductors in 2017, more than its $162 billion imports of crude oil.

China aims to produce 40% of the semiconductors it uses by 2020 and 70% by 2025. In 2018, 16% of the semiconductors used in China were produced in the country and only half of those are made by Chinese firms, according to a report by the Center for Strategic and International Studies.

Written By Brian Wang,

9 thoughts on “China Will Have $45-70 Billion in Funds to Catch Up With Semiconductors”

  1. Have tried and failed to interest EUV makers to insert adaptive optics into their optical pathway to resolve further down in feature size, and help mitigate thermal bloom etc

  2. They don’t have EUV machines, they won’t get it near term.

    I’m an engineer involved in building this machines. Do not underestimate the complexity involved. The tooling, production and measurement equipment just to build (!) an EUV machine is worth tens of billions and its all custom-build.

    The knowledge to do this is highly specialised and spread about several european companies. Its nothing you can read in a school book.

    Botton line: even with large budget, its just impossible to rebuild this without having decades (!) of experience

  3. China will never be able to copy state of the art litho maschines within the next 10 years. Its insanely complex tech. You need deep knowlege about cutting edge processes for production of nanometer scale maschine parts.

  4. That Sounds more like the final nail in the coffin of the Chinese export engine… the US is never going to go for letting chinese take over United States IC industry to the point it shutdowns 100% and all of it moves to China… They will have every hawk in the executive branch of government screaming to Perminately shut the door on the chinese Exports because semiconductors is directly linked to defense requirements that it can’t be outsourced 100% from United States… They are going to find out how unnice the hawks can be in the United States when you box them in a corner.. Where the only thing they can do to stop it is to distory china as an export economy

  5. China has been gifted massive technology and direct investment from the west over the past 40 years. But the enthusiasm for continued transfer of wealth and technology is waning. China will have to steal its “innovations” using espionage and infiltration. But that approach keeps her perpetually behind. No amount of pretending can make it otherwise.

  6. There is no domestic wafer equipment in China yet.

    China currently has no notable players that can match the technology offerings of chip equipment titans like Applied Materials, Lam Research, KLA-Tencor, Tokyo Electron and ASML. None of the world’s chip manufacturers — including market leaders Samsung, Intel and Taiwan Semiconductor Manufacturing Co. — would be able to produce integrated circuits without these vendors’ wide range of advanced wafer-processing tools.

  7. What is china’s general process node level using domestic fab equipment these days (not counting imported lithography machines)? If they hit a critical node size it would accelerate a lot of stuff. We’re already seeing the proliferation of generic ARM SoC’s as a replacement for microcontrollers due to process sizes right now, which really changed the game for all electronics. If chinese fabs hit another key process size, we could really start to see the proliferation of smartdust style objects. Naturally they want the EUV lithography, but what they have now isn’t shabby either.

  8. China will probably catch up to parity with western design. Marketing overseas and passing patent muster is another question. Just as japan, they perfected what was already invented but really never pushed a revolution.

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