Tech war: Shanghai injects US$1 billion into chip fund as China strives for self-reliance

The Shanghai Semiconductor Industry Investment Fund (SSIIF), run by the municipal government to support the local chip industry, has doubled its size to around US$2 billion after a new funding round, as the Chinese semiconductor hub pumps more money into the sector amid US sanctions targeting the industry.

The SSIIF raised 6.9 billion yuan (US$963 million) from investors, most of them state-backed companies based in Shanghai, to expand its capital base to 14.5 billion yuan, according to data from business registry database Qichacha.

The capital boost is expected to bolster the fund’s capacity to finance projects vital to helping China reach self-sufficiency in the semiconductor sector, and signifies Shanghai’s commitment to developing chip technology.

The SSIIF is among a list of funds set up by local Chinese governments to strengthen their chip industries, in addition to the China Integrated Circuit Industry Investment Fund, a national initiative also known as the “Big Fund”.

After the latest capital injection, Shanghai Science & Technology Venture Capital Group remains the SSIFF’s largest shareholder with a 35 per cent stake, followed by Shanghai Guosheng Group and Shanghai International Group, each holding an 18 per cent stake.

All three entities are fully controlled by the local regulator of state-owned assets.