China to establish second-phase national IC fund

Overseas investors are welcome to invest capital in the second phase national integrated circuit fund, which will be used to support domestic industry development, the Ministry of Industry and Information Technology (MIIT) said today in a broadcast conference. 

The first-phase national fund, with over 120 billion yuan (US$19.0 billion), has been invested in the integrated circuit (IC) industry chain covering materials, design, manufacture and assembly sectors.

The US sanction against ZTE, China’s biggest public telecommunications equipment maker, is a warning for China to invest heavily in chip research and innovation to achieve self-sufficiency, industry officials said. 

China is raising money to establish the second-phase national integrated circuit fund now because IC is a capital-intensive and technology-intensive industry, Chen Yin, MIIT’s chief engineer and spokesperson said.

“The IC industry needs global cooperation — all parts are welcomed to take part in the fund,” Chen said during the MIIT conference broadcast online.

The second-phase fund is expected to hit 200 billion yuan, industry insiders predict. Government officials were not available to confirm the figure today.

Chips are the top import product for China, worth even more than oil imports. Though China is the world’s No.1 chip market, the domestic IC industry can only meet about 10 percent of local demand.

Chips are often called the “heart” of all electronics, including smartphones, home appliances, cars and other industrial devices.