China is making moves to bolster its domestic semiconductor industry by creating the largest semiconductor investment fund in its history, called Gran Fondo III. This fund has raised 344 billion yuan (about $48 billion) from the Chinese central government, banks, and state-owned enterprises. The goal is to circumvent the US government’s ban on chips from China and boost its own semiconductor industry in the face of restrictions from the US and other countries.
The fund, created on May 24, is the result of China’s ongoing efforts to indigenize industrial production. It builds on previous initiatives like the “Made in China 2025” program launched in 2015. The fund’s size has more than doubled since it was initially created a decade ago, with additional funding provided through Big Fund II in 2019.
China’s focus on developing its semiconductor industry has raised concerns for American chipmakers like Nvidia and AMD, as China seeks to reduce its reliance on imported chips. China now aims to build a network of chip companies around Huawei to achieve technological breakthroughs in the development and manufacturing of advanced chips. This includes investing in less advanced chip manufacturing capabilities and exploring new advancements in chip technology.
While the US has imposed bans and restrictions on Chinese chips, China has responded by increasing its investments in developing its own chip capabilities. This includes initiatives like the creation of the Gran Fondo III fund, which provides financing for semiconductor projects in China.
In response to China’s growing semiconductor capabilities, American chipmakers like Nvidia have faced challenges in the Chinese market. Reports indicate that Nvidia’s advanced artificial intelligence chip, H20, produced exclusively for China, faced a weak start due to oversupply. To compete with local Chinese chip offerings, Nvidia reportedly cut prices on its flagship AI chips in some markets.
Overall, China’s efforts to bolster its semiconductor industry pose a threat to American chipmakers like Nvidia and AMD. As China increases its investments in domestic chip production, American companies may face tougher competition in the global semiconductor market.
In conclusion, China’s creation of the Gran Fondo III fund signals its commitment to developing its domestic semiconductor industry. By investing in chip manufacturing capabilities and supporting local chip companies, China aims to reduce its reliance on imported chips and achieve technological advancements in the semiconductor sector. This poses challenges for American chipmakers like Nvidia and AMD, as they may face increased competition from Chinese semiconductor companies in the future.
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https://www.benzinga.com/markets/asia/24/05/39029234/china-a-lost-market-for-nvidia-amd-the-asian-superpower-reportedly-sets-up-biggest-semiconductor-fun