Chinese city pours $29 bn to build chips

HONG KONG: As India and the US double down on local semiconductor manufacturing, the municipal government of Guangzhou in China has invested 200 billion yuan ($29 billion) to establish funds that will help spur activities involving semi-conductors, the media reported on Tuesday.

Guangzhou’s Industry Investment Fund of Funds (FoF) will focus on activities involving semi-conductors, renewable energy and advanced manufacturing, the media reported.

Meanwhile, the city’s Innovation Investment FoF will target financing for early-stage hi-tech firms.

“The city’s funding effort would appear to raise the stakes for China in its tech rivalry with the US,” the report mentioned.

US President Joe Biden enacted into law the Chips and Science Act last year that enables the US to give $53 billion in incentives to attract more chip manufacturing in the country.

Meanwhile, the Indian government approved Rs 76,000 crore to attract investments in the field of semi-conductors and display manufacturing. In China, state-level financial support has helped develop major industries over the past decades. The China Integrated Circuit Industry Investment Fund or the Big Fund in 2014 was the primary financing vehicle for its semiconductor industry, with the initial round of investments reaching over 138 billion yuan.

“The government of eastern Anhui province last month announced that it will set up a guidance fund of 200 billion yuan, targeting tech industries,” said the report.