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China plans to raise money for its national chip industry through state investment. The intended investment amount should be around 37 billion euros, Reuters writes based on sources.

The so-called tech Big Fund, under the control of state investment vehicle China Integrated Circuit Industry Investment Fund, is set to raise around 37 billion euros or 300 billion yuan. This makes this fund bigger that equivalent investment rounds from 2014 and 2019. These rounds raised 139.7 and 200 billion yuan in capital, respectively.

Greater independence from West

The new fund’s investments will be mainly for the chip manufacturing industry. With this, China aims to better compete with companies from Europe, such as ASML, and the United States. Chinese President Xi Jinping has long been pushing for more independence for his country in chip manufacturing.

This push for more independence is now only reinforced by the various export sanctions imposed by the U.S. sentence. In particular, sensitive chip manufacturing equipment, from the Netherlands and Japan among others, will no longer be shipped to the Asian country.

Also read: ASML can still supply DUV machines to China until start of 2024

Participation of state-owned companies

The investment round for Big Fund, Reuters writes, is likely to last several months. Based on previous investments, mainly state-owned and semi-state-owned companies are expected to participate in the round. These were also prominent lenders in the other Big Fund rounds.

Examples include China Development Bank Capital, the China National Tobacco Corporation and telecom operator China Telecom. The Chinese state is likely to contribute about 60 billion yuan this time.