China’s $41 billion plan to counter US’ attempts to block chip production

China plans to start a new state-backed fund aimed at supporting the country’s semiconductor industry. The US has attempted to limit China’s chip production, but it may not be effective. The $41 billion fund that China is planning will focus on fostering silicon manufacturing as the country tackles sanctions that cut its access to advanced manufacturing equipment.

The state-backed initiative from China’s Integrated Circuit Industry Investment Fund is the third such effort from the government. In 2014 and 2019, the previous two funds raised 138.7 billion yuan ($19 billion) and 200 billion yuan ($27 billion), respectively.

China’s finance ministry is expected to contribute about 60 billion yuan ($8 billion) to the fund, with other contributors yet to be announced.