China’s $47.5 Billion Fund to Boost Semiconductor Industry Will Likely End in Failure: Analysts

China’s $47.5 Billion Fund to Boost Semiconductor Industry Will Likely End in Failure: Analysts
A worker produces a semiconductor chips at a workshop in Suqian, in China's eastern Jiangsu province, on Feb. 28, 2023. STR/AFP via Getty Images
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Amid heightened U.S. technological controls over China’s chip and AI industries, the Chinese Communist Party (CCP) has launched its largest semiconductor investment fund to date. However, experts predict that this effort, much like the historical Great Leap Forward, will likely end in failure.

On May 28, state media CCTV reported that Beijing will inject 344 billion yuan ($47.45 billion) into the National Integrated Circuit Industry Investment Fund’s third phase (the Big Fund III), with six state-owned banks participating for the first time. This phase aims to enhance social capital investment in the entire IC industrial chain through multi-channel financing support.

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