China Struggles to Raise $41 Billion to Boost Fab Tool Production
There's reportedly hesitance to invest.
China is struggling to find money for the third round of funding its Big Fund aimed to finance makers of chipmaking tools with $41 billion due to economic setbacks, reports the Financial Times. Nevertheless, the Big Fund remains committed to its five-year timeline, with a renewed focus on chip production equipment.
During its initial stages in 2014 and 2019, the Big Fund accumulated significant capital, amassing $19 billion and 27.36 billion. The finance ministry played a pivotal role in funding the early stages, then local governments contributed to the effort, whereas entities like China Telecom filled in the remaining financial gaps. However, the sluggish recovery from the coronavirus pandemic has put a financial strain on traditional contributors, including heavy debt problems for some. As a result, the Ministry of Industry and Information Technology, which oversees the fund is currently grappling with challenges in securing money for the fund's new objectives.
From China's perspective, the third incarnation of the Big Fund has to finance companies developing chipmaking tools that cannot be imported to China with restrictions. Meanwhile, there are only a few successful makers of wafer fab equipment in China. The most successful ones — AMEC and Naura — specialize on etching and deposition tools. Meanwhile, there are no competitive makers of say, lithography tools in the country, so the upcoming fund will have troubles finding promising ventures.
"Instead of solely considering investment value, the Big Fund has to take into account the direction of U.S. restrictions when deciding who to bet on, leading to it having more limited options," a China-based analyst told Financial Times.
This, combined with an investigation of corruption, has made the industry more hesitant in its investment choices. Two FT sources with knowledge about the fund mentioned that the money gathered during the second round has not been fully utilized.
Nevertheless, the Big Fund remains committed to its five-year timeline, with a renewed focus on chip equipment.
"It is about time to do another round," said Linghao Bao, an analyst at research group Trivium China. "Not doing it would hurt confidence."
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Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
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NinoPino I found the title of the article totally wrong. It is not China or China government that have problems to find 41 B$ but an investment fund (I suppose pseudo private).Reply
I doubt that China have any problem with 41 billions, it is 4% the PIL (GDP) of Italy for example.
The original title from Finantial Times refers to "China's economic malaise" tha is a totally different thing. -
Co BIY NinoPino said:I found the title of the article totally wrong. It is not China or China government that have problems to find 41 B$ but an investment fund (I suppose pseudo private).
I doubt that China have any problem with 41 billions, it is 4% the PIL (GDP) of Italy for example.
The original title from Finantial Times refers to "China's economic malaise" that is a totally different thing.
"the Ministry of Industry and Information Technology, which oversees the fund is currently grappling with challenges in securing money for the funds new objectives."
It's government fund looking for private investment.
The private investors aren't convinced that there is a return in the future given the current general environment , the fund's goals, or the fund's corruption or the lingering/looming/continuing/metastasizing trade/cold war .
I find the headline fair but all headlines can't contain the full complexity of article which can never contain the full complexity of reality.
Even a rich country like China (or a richer one like the US) needs to be cautious with the levels of investment required by modern Fab facilities. -
NinoPino Co BIY said:"the Ministry of Industry and Information Technology, which oversees the fund is currently grappling with challenges in securing money for the funds new objectives."
It's government fund looking for private investment.
The private investors aren't convinced that there is a return in the future given the current general environment , the fund's goals, or the fund's corruption or the lingering/looming/continuing/metastasizing trade/cold war .
I find the headline fair but all headlines can't contain the full complexity of article which can never contain the full complexity of reality.
Even a rich country like China (or a richer one like the US) needs to be cautious with the levels of investment required by modern Fab facilities. -
NinoPino According to this site :Reply
https://www.visualcapitalist.com/100-trillion-global-economy/
41B for China is like a normal family struggle to find 60$ in a year.
For me this is ridiculous and I confirm that the title of the article is wrong. -
TJ Hooker
Your link is looking at GDP, which is very different than government budget/revenue (although they are related).NinoPino said:According to this site :
https://www.visualcapitalist.com/100-trillion-global-economy/
41B for China is like a normal family struggle to find 60$ in a year.
For me this is ridiculous and I confirm that the title of the article is wrong. -
unitedbamboo China is already producing 5nm chips. Now available in the next Huawei matebook.Reply
Intel can only produce 10nm at the moment. lol