China has launched its largest semiconductor investment fund to date to boost its domestic chip industry amid escalating tensions with the United States. 

Big Fund III of China

According to Fortune, the third phase of the National Integrated Circuit Industry Investment Fund, known as Big Fund III, has accumulated 344 billion yuan ($47.5 billion) from the central government and several state-owned banks and enterprises.

This initiative marks a renewed effort by Chinese President Xi Jinping's administration to achieve self-sufficiency in semiconductor production. The move comes as the Biden administration launched extensive restrictions on China's access to advanced chips and chipmaking equipment. 

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US Chip Restrictions on China

The US has imposed a series of export control measures to restrict China's access to advanced AI chips made with US inputs. The US is also urging allies like South Korea, Japan, the Netherlands, and Germany to further tighten restrictions on China's access to semiconductor technology.

In response, China is now enhancing its legacy chip production capabilities. The creation of Big Fund III is expected to support this project, fostering a network of chip companies like Huawei for advancements in semiconductor technology. 

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