The Chinese government has recently launched its third “Big Fund” with an investment of $48bn, aimed at boosting the domestic semiconductor industry. This move aligns with similar investments from America and the EU, all seeking to expand local chipmaking capabilities.
However, Chinese chipmakers are facing significant challenges due to restrictions imposed by the American government in October 2022. These restrictions limit the export of advanced chips and chipmaking equipment to China, which are made using American intellectual property. As a result, Chinese firms are struggling to produce leading-edge microprocessors with the latest technology.
Despite these challenges, Chinese chipmakers continue to produce less advanced chips with larger transistor sizes. These chips are used in a variety of everyday devices such as televisions, thermostats, refrigerators, and cars. While they may not be at the forefront of technology, there is still a demand for these chips in the market.
