The Chinese government is supporting its semiconductor industry with multibillion-dollar investments. You have no choice if you want to stop completely depending on foreign technologies that you currently have access to. can’t accesswell can only be obtained by resorting to intermediaries or secondary markets. Two of its largest investments came in 2014 and 2019, before the technological war that we are witnessing broke out.

In 2014, it injected about $19 billion into its chip industry, and in 2019 this figure increased to almost $27.5 billion. However, these investments pale in comparison to the one it made in September 2023: it allocated no less than $41 billion in subsidies to lithography equipment manufacturers. And it did so because the impossibility of accessing the most advanced machines produced by the Dutch company ASML forces it to develop its own cutting-edge equipment.

In any case, this is by no means all. At the end of last May, the Chinese Administration supported a $47.5 billion investment fund aimed at further strengthening its semiconductor industry. The Chinese Ministry of Finance is the largest shareholder in the fund with a contribution of 17% of the capital, and the China Development Bank contributes 10.5%. Thanks to these investments, Chinese lithography equipment manufacturers are achieving achievements that would otherwise likely have taken much longer to achieve.

China is failing private investment

As we have just seen, the Chinese Government is putting all its efforts into promoting the development of its semiconductor industry, but it needs something more. It needs private investment. And 2024 in this area has been a bad year for China. According to SCMPDuring the first eleven months of the current year, the Chinese integrated circuit industry signed 677 investment agreements, a figure that represents a drop of 35.9% compared to the same period in 2023.

A drop of almost 36% in two consecutive years is outrageous, especially in a situation like the current one in which China needs to boost the competitiveness of its companies linked to the chip industry at any price. Besides, according to the consulting firm JW Insights total financing fell 32.4% year-on-year, so there is no doubt that the outlook at the gates of 2025 does not look good for China.

The company that has come out the best during 2024 if we stick to the amount of investments that the Chinese semiconductor industry has received is Changxin Memory Technologies (CXMT). It’s no surprise. After all, this company is one of the most important memory chip manufacturers in this Asian country, and one of the few that can compete with certain guarantees with Samsung, SK Hynix and Micron.

CXMT has benefited from an investment round of approximately $1.48 billion. Be that as it may, there is no doubt about one thing: the latest sanctions by the US and its allies They are making it more difficult for China than everso 2025 will bring us strong emotions in this area. It will be interesting to see what new measures the Government led by Xi Jinping adopts to continue supporting its chip industry.

More information | SCMP

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