China Unveils Massive 3.4 Trillion Yuan Fund to Bolster Semiconductor Industry
In a bid to bridge the technological gap with the United States and achieve self-sufficiency in the semiconductor industry, China has announced a substantial investment plan. On May 27, the Chinese government unveiled the establishment of a 3.4 trillion yuan (approximately $647 billion) fund, dubbed the "Big Fund 3." This marks the largest fund ever created by the Chinese government to foster the development of the semiconductor industry.
The "Big Fund 3" will be channeled into three key strategic areas: advanced semiconductor manufacturing and design, semiconductor materials and equipment, and talent cultivation. Through these investments, China aims to reduce its reliance on core semiconductor technologies, strengthen domestic production capabilities, and lay the groundwork for the sustainable growth of the semiconductor industry.
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This investment is expected to have a positive impact on China's semiconductor self-sufficiency, economic growth, and diversification of the global semiconductor supply chain. However, several challenges remain, including technological development capabilities, talent shortages, and international cooperation.
The "Big Fund 3" investment is considered a pivotal moment in China's semiconductor industry development. Whether China can successfully achieve semiconductor self-sufficiency and surpass the United States as the world's leading semiconductor powerhouse through this investment remains to be seen.
Current Landscape of Semiconductor Industry Competition between the US and China
The semiconductor industry is characterized by intense competition between the United States and China. The United States is home to global semiconductor giants and holds a dominant position in advanced semiconductor technologies, which are utilized in critical information and military systems. Additionally, the US implements policies to restrict China's access to semiconductor manufacturing technologies, providing financial support to domestic semiconductor manufacturers.
China, on the other hand, stands as the world's largest semiconductor consumer, accounting for 36% of the revenue of US semiconductor companies. Despite significant investments in semiconductor technology development, China still lags behind developed nations like the US in terms of technological capabilities. However, China has demonstrated rapid advancements in semiconductor design capabilities over the past decade.
Restructuring of Global Semiconductor Supply Chains
The intensifying technological rivalry between the US and China is reshaping global semiconductor supply chains. The US has enacted executive orders reviewing supply chains in four critical sectors, including semiconductors, and has introduced the Semiconductor Science Act to curb China's semiconductor industry and restructure global supply chains. In response, China has vehemently opposed US semiconductor containment measures and is anticipated to accelerate its semiconductor ambitions under President Xi Jinping's third term.
The semiconductor technology competition between the US and China is a dynamic landscape, and its trajectory will significantly impact future semiconductor industry trends and the global semiconductor supply chain.
Senior Reporter Jerry Ahn
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