[News] China’s Big Fund Faces Hurdles in Organizing Third Phase, Initial Funding Encounter Challenges

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According to reports from the Hong Kong’s etnet, it was announced in early September that China’s National Integrated Circuit Industry Investment Fund (known as the “Big Fund”) is planning to organize its third fund, with a scale reaching 300 billion yuan, aimed at supporting and revitalizing the semiconductor industry.

However, in response to the latest reports, the initial fundraising phase of the third Big Fund has encountered difficulties due to the challenging economic recovery environment in China. The China State Council Information Office, the Ministry of Industry and Information Technology, and the Big Fund have not yet provided any official response to these reports.

The China National Integrated Circuit Industry Investment Fund launched its first fund in 2014 and its second fund in 2019, raising approximately 138.7 billion yuan and 200 billion yuan, respectively. These funds were intended to bolster China’s semiconductor industry and compete more vigorously with the United States and other global rivals. Contributors to the Big Fund include the Ministry of Finance, China Development Bank Capital, China National Tobacco Corporation, and China Mobile, among others. The Big Fund has invested in various chip companies, including China’s leading semiconductor foundry, SMIC (Semiconductor Manufacturing International Corporation). Collectively, the first two Big Funds held approximately 9.4% of the company’s equity.

Despite being a key player in China’s semiconductor investment landscape, the Big Fund faced a scandal in mid-2022 involving allegations of illegal activities. Several officials, including Ding Wenwu, the former General Manager of the National Big Fund, and senior executives from SINO-IC Capital, the fund manager, were investigated by the Central Commission for Discipline Inspection. This incident raised concerns about its potential impact on the development of China’s semiconductor industry.