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The Chinese government continues to funnel money into its domestic chip capabilities in order to reduce reliance on US technology
The Shanghai Semiconductor Industry Investment Fund (SSIIF), managed by the local government to support the city’s chip industry, has doubled its size to around $2 billion after a recent funding round.
The new funds were primarily contributed to by state-backed entities based in Shanghai, in the city’s strategic push to bolster its semiconductor industry amid ongoing US sanctions targeting China’s tech sector.
This cash increase is expected to enhance the SSIIF’s ability to finance crucial semiconductor projects aimed making China less reliant on foreign technology.
Since its establishment in 2016, the SSIIF has been instrumental in supporting major players in the local chip industry, including Semiconductor Manufacturing International Corporation (SMIC), China’s largest chip maker.
The latest funding boost into the SSIIF comes on the heels of Shanghai’s launch of a new $6.2 billion Integrated Circuit Industry Parent Fund in July 2024. This fund , part of the Made in China 2025 plan, aims to bring China’s semiconductor industry up to international standards by 2030.
The move underscores China’s intention to reduce its dependence on foreign technology, particularly after the export controls imposed by Washington. The US has imposed strict sanctions on China, restricting its access to advanced semiconductor technology, including chips, equipment, and software. These measures target Chinese firms like SMIC and block them from acquiring the critical US-made tech required to produce the most advanced chips.
While China has certainly made rapid technical progress in semiconductors in recent years, the US government remains unphased. Earlier this year, the US secretary of Commerce Gina Raimondo dismissed Huawei’s latest chip technology breakthrough powering its latest smartphone, the Mate 60 Pro, describing it as “years behind what we have in the United States”. She also confirmed that the US would not trade with China on technologies that affect national security.
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