Xiaomi Corp. has come forward to help the chip industry in China by establishing a fund. Lei Jun, a tech billionaire, is putting in efforts to shore up the industry targeted by the US government to prevent access to advanced semiconductor technology in China.
In today’s latest BNN news, Kingsoft Corp., a cloud and software company, and Xioami have established a fund of $1.45 billion to support the industries targeted by the US government. A group of investors backed by the government has also contributed to the fund, according to a regulatory filing announced by Kingsoft.
Third largest provider of smartphones in the world
Xiaomi is one of the largest smartphone producers in China. It occupies the third slot in the world after Apple Inc., which is number one in smartphone production, and Samsung in the production of smartphones. Mr. Lei is the founder and Chief Executive Officer of Xiaomi. He is also the chairman and founder of Kingsoft, which engages in offering office software, cloud services, and gaming products.
Mr. Lei heads the investment decision committee of the new fund
In a filing with the HKSE on Thursday, Xiaomi announced the establishment of a new fund to support investments in advanced chips and related technologies in China. Mr. Lei is the chairman of the newly formed fund’s committee for investment decisions in sophisticated technologies and semiconductors.
According to the latest communiqué, Xioami contributes two-thirds of the fund through its two subsidiaries. The new fund will receive Yuan 500 million from a subsidiary of Kingsoft. The remaining amount will be contributed by investors backed by the Beijing and Tianjin governments.
It is the latest among the initiatives to shore up funds for the support of the semiconductor industry, achieve self-sufficiency in advanced chips in China, and counter the sanctions imposed by the US government against chip makers in the nation. Urgency has emerged after the US government has taken efforts to limit China’s access to advanced chip manufacturing technology and advanced chips.
The Netherlands and Japan have recently joined the US in restricting access to advanced chip manufacturing technology in China. It is an effort to slow down military development using advanced technologies in China.
According to an announcement, the fund will support the development driven by innovations and transform industries to suit national interests. The fund will also invest in businesses and high-tech companies that engage in smart manufacturing, artificial intelligence, display technologies, automotive electronics, and new materials supporting the production of advanced chips of national interest.
Established fabrication facilities for lower-end chips
According to the latest world news, China has already established fabrication facilities for the production of low-end chips. However, it is facing difficulty in developing the capacity to build high-end circuits for use in smartphones and sophisticated data processing work.
The new restrictions imposed by the US have further eroded China’s access to advanced chip manufacturing equipment and high-end chips. Chip companies in China rely on smaller suppliers in the US and the Netherlands for such advanced equipment.