China’s state-backed semiconductor investment fund – the China Integrated Circuit Industry Investment Fund Co, also known as the Big Fund – a key institution in Beijing’s drive for greater self-sufficiency in semiconductors, has appointed Zhang Xin as President. He is a former Senior Inspector at the Chinese Ministry of Industry and Information Technology (MIIT). The Fund, which is the main channel for state support of the chips sector and which raised CNY138.7 billion in 2014 and another round of CNY204.1 billion in 2019, has in the past year been rocked by corruption scandals with several senior executives put under investigation by authorities for “suspected serious violations of the law”. However, the anti-corruption probes have not stopped the flow of funds into China’s favored projects. For example, the country’s top memory chip maker Yangtze Memory Technologies Co (YMTC), which was added to a U.S. trade blacklist last year, recently received a USD7.1 billion capital boost from state-backed investors, including the Big Fund. Zhang’s reported appointment comes after Ding Wenwu, the former President of the Fund, was put under an anti-corruption investigation on July 30, 2022.
Meanwhile Lu Jun, a former banker and Chief Executive at Sino IC Capital, the management entity of the Big Fund, was expelled from the Chinese Communist Party in January and is expected to stand trial after his case was transferred to the public prosecutor. Zhang’s appointment marks the first senior personnel change since the onset of corruption investigations last year, and could signal the start of a new chapter for state investment in the chips sector. Zhang’s name was added to the board of the Big Fund with Li Guohua and Xu Yanghua. Ding Wenwu was removed from the board's list. The Big Fund now has 14 directors on the board.
China’s top leadership has amplified calls for greater self-sufficiency in semiconductor technology amid the imposition of tighter U.S. export controls on national security grounds in recent months. Meanwhile, Beijing has accused the U.S. of flouting global trade rules and has called on countries such as South Korea and the Netherlands to maintain close trade ties with China. China has encouraged more domestic procurement over the past three years, with an industry-wide goal of using about 70% of locally-supplied chip manufacturing equipment in value terms. However, China still depends on imported tools and materials for more advanced chip production and this is unlikely to change in the short term, the South China Morning Post reports.
