Chinese government to invest billions in semiconductor manufacturing
The Chinese government will invest about 26 billion euros in the production of semiconductors. The government does this to be less dependent on American companies. The country annually imports $200 billion worth of chips from countries such as the US.
According to a document published by the Chinese government, the investments mainly come from Chinese state agencies. For example, the Ministry of Finance is making an investment of 2.87 billion euros, while the China Development Bank is investing 2.8 billion. Local governments and companies are also investing in the fund, including China Tobacco.
China is the world’s largest chip importer and previously announced that it would invest heavily in the production of its own semiconductors. The government indicated to invest 204 billion yuan, converted about 26 billion euros, in chip production on its own soil, writes financial news agency Bloomberg. The Chinese government is turning words into action this week by setting up an official investment fund.
It is not the first time that China has invested in chip production. For example, chip manufacturer Tsinghua Unigroup received an investment of 20 billion euros in 2017. China hopes to make its investments less dependent on Western governments. The new developments appear to be partly due to sanctions from the US government, which is increasingly blacklisting Chinese companies. Companies on this list are not allowed to export products from the US.
In June 2019, China produced about 16 percent of its own chips, CNBC wrote. This concerns products such as the Kirin-socs from Huawei, which are produced by HiSilicon. Incidentally, the company does use ARM’s chip architecture for these chips.
By increasing its own chip production, China may in the future be able to largely abandon chip imports from countries such as the United States. According to Bloomberg, the country has the vision to invest “hundreds of billions of dollars” to gain a prominent place in the chip industry. According to bosses of American tech companies, this could have a “negative impact on US interests,” the news agency writes.
China has long had the ambition to abandon the production of cheaper goods. According to the Made in China 2025 plan presented in 2015, the country must produce about 70 percent of all core materials for high-tech products on its own soil that year.