China has committed to investing an additional of $1.9 billion in its largest memory chip manufacturer. State-owned National Integrated Circuit Industry Investment Fund Ltd. will invest 12.9 billion yuan towards Yangtze Memory Technologies Company to provide the US sanctions-hit industry with some capital influx.
The memory chip manufacturer is based in Hubei and is one of the only domestic chipmakers that are close to competing with global leaders such as Samsung. The size of the investment indicates how China is once again increasing its spending on its struggling chip industry. The chip industry in China has been trying to get around US restrictions while also dealing with a decrease in global command. The investment in Yangtze Memory is one of the most significant one made by the state-owned fund in several months.
In 2022, senior leaders in China launched a widespread anti-corruption campaign due to slow progress in developing local alternatives to chips made elsewhere. The campaign resulted in the removal of several senior officials and executives in the industry. In addition to this, zero-COVID policy in China also resulted in the slowing of chip manufacturing in the country.
The United States has imposed export controls on Chinese semiconductors that has also had a significant impact on China"s chip industry. As many has 5,746 companies were deregistered in 2022. Along with US, the Netherlands and Japan have also restricted chip-making equipment to China.
Source: Bloomberg (paywall)