China’s economic malaise hits efforts to raise $41bn chip fund

  • The most ambitious funding round launched to date by China to support its semiconductor industry is struggling in the initial phases to raise its target of Rmb300bn ($41bn), with the difficult economic climate being blamed, according to three people familiar with the situation.
  • The fund raised capital of Rmb139bn and Rmb200bn, respectively, in its first two phases and supported Chinese chip champions while investing in research and development.
  • However, the Ministry of Industry and Information Technology, which leads the initiative, has run into difficulty raising its new target from local governments and state-owned enterprises, which are struggling in an economic slowdown, said the three people.
  • The sluggish recovery from the coronavirus pandemic has put a financial strain on local governments, including heavy debt problems for some, making them “more cautious and conservative” in their investments, said one person close to a provincial-level government.

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