China to invest another $28.9 billion in semiconductor self-sufficiency

China is earmarking 204.15 billion yuan ($28.9 billion) for the second phase of its "Big Fund" investment in semiconductor companies. The funding is provided via a newly created company called National Integrated Circuit Industry Investment Fund Phase II Co., Ltd, and is twice as big as the first round of funding.

At the moment it's unclear which chip sectors and who will benefit for the Big Fund Phase II. EE Times offers some analysis and speculation over here. A major focus will be to focus on self-sufficiency, to build a supply chain that does not depend on the rest of the world. We're already seeing this in the DRAM and NAND markets, where China is building up production capacity to reduce reliance on imports.

At a September semiconductor industry summit, the Big Fund’s manager revealed that Phase II will focus on etching machines and film, test and cleaning equipment. The goal is to build an independent, self-sufficient and “controllable” industrial chain for the Chinese IC industry.

China’s industry watchers, however, are split as to where Phase II should look. Some advocates want to go after the semiconductor industry including “downstream applications.” Another camp favors “design materials and equipment.” A third faction believes it’s critical to invest in new applications enabled by emerging technologies such as 5G and AI.