China Closing in on Second $19 Billion Semiconductor Fund in Response to US Trade Tensions

(From Reuters)

China’s state-backed semiconductor fund is near to closing a 120 billion yuan ($18.98 billion)investment round for a second fund to support the domestic chip sector and help cut reliance on imports amid a bruising trade standoff with the United States.

The National Integrated Circuitry Investment Fund, also known as the “Big Fund”, is close to announcing the establishment of a new fund that will focus on boosting local chip production and technologies, according to three people with knowledge of the plans.

Reuters reported this month that Chinese officials were planning to accelerate the development of the domestic chip market, spooked by trade tensions and U.S. sanctions on ZTE Corp (000063.SZ)(0763.HK), a local telecoms equipment firm, that has underscored China’s heavy reliance on imported chips.

China’s industry ministry on Wednesday said the fund was raising its second investment round and that it welcomed foreign institutions to take part, without giving details.

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