The Chinese government has always generously funded the country’s hi-tech industries, especially when it comes to semiconductors. Over the past decade, this funding mostly came via the China Integrated Circuit Industry Investment Fund, aka the “Big Fund”. Established in 2014, its first phase doled out 138.7 billion yuan (US$19 billion) to local chip ventures. A second phase in 2019 saw 204.1 billion yuan in funding become available, while the third phase was launched in May with registered capital of 344 billion yuan. Add that all up, and it far exceeds the US$52 billion the US government allocated via the CHIPS act. However, China-based firms now have to solely rely on state money because foreign investment into the country is on the decline, and Washington has restricted American venture capital from going to Chinese semiconductor and AI companies. This trend was evident in figures released this week by JW Insights, a Chinese consultancy and research firm. In the first 11 months of 2024, China’s chip industry recorded 677 investment deals, a decline of 35.9 per cent year on year. In the same period, total funding fell by 32.4 per cent year on year. The largest deal by ticket size was a US$1.48 billion funding round announced in March by DRAM maker ChangXin Memory Technologies (CXMT). While some private-sector money was part of that – from Chinese flash memory designer GigaDevice – the other investors were all state-backed entities, including several major Chinese banks. Washington further tightened restrictions on China’s chip sector this month, imposing export controls on 24 types of chipmaking equipment and three categories of critical software, while adding 140 chip-related Chinese organizations to its trade blacklist. The restrictions are over concerns that US core tech could be used to modernize the Chinese military, In response to the latest curbs, Beijing launched an antitrust probe into US AI chip giant Nvidia. JW Insights data also showed that in the third quarter of 2024, the US semiconductor market surpassed mainland China to become the world’s largest single market. “The surge in demand for advanced computing chips and high-end memory products – driven by the current artificial intelligence boom – has been hindered by domestic supply chain restrictions in China, while the US has made massive investments in AI infrastructure,” said Han Xiaomin, general manager of JW Insights. https://www.scmp.com/tech.. #🇨🇳 ChinA.I. 🤖🧠🦾🤖